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SGX Mainboard-listed Chemoil, one of the world's leading suppliers of marine fuel, has announced its acquisition of OceanConnect Holding's (OCH) marine fuel business.

The purchase price, as agreed by both parties, is expected to be approximately US$25 million and took into account factors such as the marine fuel business' historical and future earnings potential.

The deal includes the acquisition of OCH's marine fuel business, its independent online bunker auction portal, and a team of experienced bunker brokering and trading employees and staff in the United States, United Kingdom, United Arab Emirates, South Korea, Japan and Denmark. The newly acquired business will continue to operate using the name OceanConnect Marine (OCM).

Simultaneously, OCH's former Chief Executive Officer, Tom Reilly [pictured], has also been appointed as Chemoil's new CEO and Director as of January 3, 2011. Mike Bandy, who held the dual role of Chairman and CEO in Chemoil, will remain as Chairman and Non-Independent Director.

Commenting on the acquisition, Bandy said: "The addition of OCM is accretive, and certainly complements our stable of businesses, which include GPSChemoil, ChemoilAdani, Burando, Galaxy and IPC (USA). It would increase Chemoil's annual sales volumes by 8 to 9 million metric tonnes, substantially expand our presence in several key markets and strengthen our competitive advantage in providing speedy, cost-effective and highly reliable fuel supplies to shipping operators worldwide."

"The appointment of Mr Reilly as the new CEO is in line with the company's succession plans to put in place a strong leadership team to see Chemoil through a new era of growth. It will also see a separation of the roles between Chairman and CEO, and hence enhance the company's Corporate Governance Code compliance," Chemoil said in a statement.

Bandy added: "I am pleased that our search for the next CEO has come to a successful close. Tom brings deep industry experience that will strengthen our bunker trading, risk product and brokering service teams. Chemoil's Board and senior management are looking forward to working with him on our continual efforts to increase business, improve profitability and create greater shareholder value."

Prior to his role as CEO of OCH, Reilly was Vice President for Fuel and Marine Marketing LLC, a Texaco and Chevron joint venture, and was responsible for bunkering and fuel trading in the Pacific Rim and the Middle East regions.

Chemoil's newly appointed CEO concluded: "It is a privilege to be part of the Chemoil team. The OCM acquisition reflects what Chemoil has done well in the past in terms of forming strategic alliances and focusing on the 3 growth dimensions: markets, products and its logistics assets. Together with the Chemoil Board and the management team, we will steer the company through the current challenging low-margin market conditions, towards being a premier and sustainable market leader of tomorrow."