Hinduja Group's subsidiary Gulf Oil Corp has acquired US-based specialty chemicals producer Houghton International Inc for $1.05 billion (Rs 5,714 crore).

This is the biggest acquisition by an Indian firm so far in 2012. Previously, Rain Commodities' acquisition of Belgium-based specialty chemicals group Ruetgers for $918 million was the biggest deal of this year.

The acquisition of Houghton International Inc is expected to provide Gulf Oil with a much bigger geographical reach as well as new products and technology.

However, worries over funding the huge acquisition dragged Gulf Oil shares down by 1.43 per cent to Rs 86.35. To allay such worries, Hinduja Group Chairman Ashok Hinduja said that the whole deal would be funded without straining the Indian entity's balance sheet.

With a market share of 12 per cent, Houghton is the world's biggest supplier of metal finish fluids and industrial lubricants. In comparison, rival firms BP Castrol and Quaker own a 7 per cent market share.

Houghton International Inc is roughly four times bigger than Gulf Oil in terms of revenues and six times bigger in terms of EBITDA. It recorded, on a 12-month basis ended September 30, sales and adjusted EBITDA of $858 million and $132 million, respectively.