Aegis Logistics and Royal Vopak to form a major joint venture for LPG and chemical terminals in India
EY is advising Aegis Logistics Limited (“Aegis”) in a marquee transaction in the energy storage space involving a € 200 mn investment (enterprise value of the investment) by Royal Vopak N.V. (“Vopak”) to form a major joint venture for LPG and chemical terminals in India.
EY is acting as the exclusive M&A advisor to Aegis
Aegis is India’s leading oil, gas and chemical logistics company and plays a key role in India’s downstream energy sector.
Vopak is the world’s leading independent tank storage company with over 400 years of history and a focus on sustainability.
Aegis and Vopak have decided to join forces in India with the aim to grow together in the LPG and chemicals storage and handling business. The 2 companies will form a major joint venture, Aegis Vopak Terminals Limited (“AVTL”). Vopak will acquire a 49% shareholding in AVTL. In addition, Vopak will also acquire a 24% shareholding in Hindustan Aegis LPG Limited (“HALPG”) which is currently a joint venture between Aegis (75% shareholding) and Itochu Corporation, Japan (25% shareholding). Further, CRL Terminals Private Limited, Vopak’s chemical terminal in Kandla, will also become a wholly-owned subsidiary of AVTL. The overall transaction envisages a payment of INR 2,568 crores – INR 2,766 crores to Aegis over a period of time.
AVTL will operate a network of 7 terminals located at 5 strategic ports along the east and west coasts of India. HALPG operates an LPG terminal at Haldia, West Bengal. With 8 strategically located terminals and an initial capacity of ~960,000 m3, growing to ~1,103,000 m3, the partnership will become one of the largest independent tank storage companies for LPG and chemicals in India. The partnership is well positioned for further growth since LPG is earmarked by the Indian government to provide cleaner and safe cooking fuels for households. Further, the partnership will also target chemicals and industrial terminal opportunities.
The parties expect the transaction to close in early 2022, subject to customary closing conditions. Aegis will continue to retain 100% ownership of its Mumbai LPG and chemical terminals and its LPG retailing business.
We believe that this partnership would play a pivotal role in supporting the growth of India’s LPG and chemicals industry as storage terminals have an indispensable role in global supply chains.
