There are significant, potentially attractive and synergistic opportunities to service customers in South Africa and across the African continent, leveraging the combined presence in complementary operating regions and providing opportunities for expansion into unpenetrated frontier regions, Omnia said in a presentation about the transaction.

Omnia announced May 11 it would acquire 90 percent equity in Umongo Petroleum for $58.3 million.

Omnia said that Umongo will complement its chemical business unit, which distributes specialty chemicals, functional chemicals and polymers in sub-Saharan Africa. Umongo is a market leading business which is complementary to Protea Chemicals and which will contribute to its product and market strategy, said Omnia. The addition of a bulk volume base oil, additive and lubricant business to Protea Chemicals, will broaden its current product offering and create new opportunities to grow the business in South Africa well as sub-Saharan Africa.

Wayne Koonin, group financial director for Omnia, noted that the acquisition of Umongo is a logical step for Omnias development and its long-stated strategy to strengthen its chemical business unit.

Under the agreement, Boston Moonsamy will remain as CEO and Mahmoud Homayoun as chairman of Umongo, and the Umongo management team and staff remains unchanged.

Patrick Swan, formerly president of the South African Institute of Tribology and principal consultant at Aswan Consulting, said the acquisition may not make much difference for the South African market but will provide a platform for Umongo to expand into Africa.

While Omnia is targeting the mines and other end users, Umongo is targeting blending plants. I dont see any conflict of interest between those two brands – rather there is some synergy, said Swan.