August 21 (SeeNews) - South Africa-based energy storage products manufacturer Metair Investments said it has walked away from the acquisition of Slovenian car battery producer Tovarna Akumulatorskih Baterij (TAB) due to the weakening of the South African currency, the rand.
Referring to the acquisition as a "once-in-a-lifetime opportunity", Metair said in a statement late last week that TAB's rand price has soared because of volatility in emerging-market currencies.
You can subscribe to our M&A newsletter here
Metair will now focus on maintaining the good performance of its Turkey-based battery business Mutlu.
"Management is focused intently on ensuring that Mutlu’s operational performance is sustained during the second half and that measures are taken to mitigate the impact of currency volatility", CEO Theo Loock said.
He noted that another company is likely to acquire TAB soon.
"I do not think it is going to be available for a long time. Such opportunities come once in a lifetime".
Metair in June announced its plans to acquire TAB for 300 millon euro ($345.4 million).
Loock explained that he is uncomfortable with the increase in the asset’s rand price.
"We have a rand figure for the asset, which we have not disclosed to the market".
When the company announced the planned deal in early June, the 300 million euro was 4.43 billion rand. At Thursday afternoon’s rand/euro exchange rate of 16.61 rand, TAB was worth almost 5 billion rand.
In June, Metair entered into exclusive discussions with TAB. During the period of exclusivity, Metair went through TAB’s past financial statements. The exclusivity period would have ended on October 1.
TAB has after-market automotive battery manufacturing facilities in Slovenia and Macedonia, an automotive aftermarket battery distribution network throughout Europe, as well as a global industrial battery business and an energy storage business.
($=0.868630 euro)