Chinese shipping giant sees an opportunity with French lubes producer Total
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COSCO take a large stake Image: COSCOCOSCO Group (COSCOL which owns the world’s fifth largest shipping line COSCO Shipping, will acquire a 20% stake in TOTAL Lubricant China.
The stake, purchased through a subsidiary Guangzhou Ocean Shipping, will be obtained in two separate phases.
Phase One will see Guangzhou Ocean Shipping pay 240.6m ($39.1m) for an 11.5% stake in TOTAL Lubricant China and, in the second phase, the company will leverage its 37% stake in ELF Lubricants (Guangzhou) purchased in 1995, itself a subsidiary of TOTAL China, to invest in TOTAL Lubricant China.
The deal should be completed by 2015 when COSCOL reckons it will see a healthy windfall of between 220m and 270m yuan ($35.8m to $44m) as a result of the acquisition.
TOTAL China has been consolidating its lubricants business in China by making ELF Lubricants (Guangzhou) a subsidiary of TOTAL Lubricant China, thereby integrating its three separate arms.
According to the regulatory filing, COSCOL sees an opportunity, through TOTAL, to tap into China’s growing demand for high-end family car lubricants. Last year, China consumed over 7.5m tons of lubricants, compared to just 3.41m tons in 2000, an increase of over 149%.