Omnia takeover signals major shift in mining, agriculture

This week’s R22bn takeover bid for Omnia, by India’s Solar SA Investments, if approved, will see the group exit the JSE after nearly 50 years on Africa’s largest bourse.

Solar this week dangled a multibillion-rand carrot before Omnia shareholders in a bid to take control of the 73-year-old legacy of a group that diversified from a fertiliser into a chemicals and explosives maker for the mining industry.

Founded in 1953, Omnia has morphed into a R10bn company with a presence in 23 countries, its main pillars being agriculture and mining through BME, its bulk explosives division, which owns the largest nitrate facility in the region.

Omnia, alongside AECI, the 100-year-old chemicals group, are the only listed explosives and fertiliser companies in South Africa.

Record metal prices after the war in Ukraine have been a major tailwind for the group, which posted an R1.6bn profit in 2025.

The stock at R115 a share marks a significant turnaround since 2019, when it traded under R15 a share. Under CEO Seelan Gobalsamy. who was appointed in 2019, the group undertook a restructuring of assets and the selling of struggling assets.

Solar SA, a Solar Industries subsidiary, is proposing to pay R135 a share, representing a premium to Omnia’s share price at market close on September 10.

The premium points to the opportunities in the company’s portfolio.

Gobalsamy told journalists that the takeover bid, if approved by shareholders, speeds up growth and highlights Solar’s intention to invest in Omnia for the long term.

“I don’t think Solar is doing something to make a quick buck, if I can call it that. Solar is investing in Omnia for the long term,” he said.

Despite the acquisition, Omnia remains committed to South African customers, Gobalsamy said.

“I see no reason why Solar would not be committed to that. Certainly Omnia is committed to that, and the combination is committed to that. Solar is seeing this as a big investment on the African continent, and they’re seeing this as a big part of a global expansion.”

Stephan Erasmus, an investment analyst at Anchor Capital, said the fertiliser industry is volatile and driven by the weather.

South Africa’s maize crop averaged about 8.9-million tonnes during the 2015 and 2016 droughts, and the latest estimate this season is a record 17.4-million tonnes, with fertiliser around 35% of a maize farmer’s input costs.

“What’s interesting about Omnia is that its Sasolburg plants are built around optionality. Ammonia comes either from Secunda or is imported through Richards Bay, and the nitrophosphate process uses locally sourced phosphate rather than imported,“ Erasmus said.

Erasmus believes there is little understanding that fertiliser and explosives are very similar from an input-material perspective.

Ammonia becomes nitric acid and then ammonium nitrate, which goes one way into fertiliser and the other into mining explosives from the same plant.

“The industry seems to be changing quickly with solar bidding for Omnia and Sasol selling its nitrates business, which includes the ammonia conversion plants at Secunda and Sasolburg, to Enaex Africa,” he said.

Earlier this month petrochemicals company Sasol announced plans to sell its nitrates business to Enaex Africa.

Gobalsamy said the conflict in the Middle East does not have an impact on the transaction given the group’s growth trajectory.

“If you look at how we’ve been focused on serving customers, we’ve done so, you know, with the Middle East, with Russia, Ukraine, with the blockages in the Suez Canal, with the movements in the commodity prices,” he said. He said Omnia has delivered consistently to its customers and shareholders.

“I think if you take a long-term outlook, you know, Omnia is a strong business, and Solar is taking a long-term outlook in its investment profile and how it goes about doing things,” he said.

Solar began as a family business focused on explosives 30 years ago and has broadened its footprint into aerospace and defence, with operations in 90 countries. International revenue from its industrial explosives grew 32% in 2025 as the group pushed expansion across Africa, Central Asia, Southeast Asia and India.

The merger is expected to close in 2027, subject to regulatory approvals.

In a statement this week, Solar Industries said the merger would create one of the largest integrated explosives and blasting solutions platforms globally, with expanded manufacturing capabilities.

It said the benefits of this expanded footprint, strengthened industrial base and broader customer access are expected to become increasingly visible from the 2028 financial year, increasing Solar Group’s revenue attributable to Africa’s mining market by multifold growth.

“The acquisition is therefore expected to be highly complementary to Solar Group’s long-term vision of becoming a leading global explosive, blasting solutions and industrial chemicals enterprise,” it said.

Gobalsamy said the Solar management team is not looking at a cycle of agriculture or a cycle of mining, pointing to the long-term value proposition of the firm.

“They’re not looking at El Nino; they’re not looking at where the mining cycle is at the moment. What they’re focusing on is the long-term outlook. You might find that, you know, if you just look at a cycle now, a shareholder might disinvest or invest,” he said.