US-based Valvoline has agreed to sell its global lubricant business to Saudi Aramco in a cash deal worth $2.65 billion.
Following completion of the sale, Valvoline will focus on its retail services business, which provides preventive maintenance services such as rapid oil changes for consumers. After tax and other expenses, it plans to distribute most of the capital from the sale to shareholders through share buybacks. The remaining capital will be invested in promising growth opportunities for the retail services businesses or used to reduce debt.
Aramco’s Senior Vice President for Downstream, Mohammed Y. Qahtani, said that the global products business of Valvoline was a good fit for his company with its extensive capacity to produce base oils. He said the acquisition would help to develop Aramco’s relationships with original equipment manufacturers (OEMs) further and boost its research and development capacity. He added:
“Valvoline’s brand strength and global recognition will continue to be developed and extended under Aramco’s stewardship. We are also very excited to have the outstanding people of Valvoline’s Global Products join the Aramco family as we continue to execute on our ambitious strategy.”
Both companies will use the iconic Valvoline brand for their respective businesses, so they will work together to manage it holistically and consistently.
While the owner may be changing, the company will no doubt continue to make and sell top-notch products like the Valvoline Tectyl rust preventative. If you are interested in this or other Valvoline products, our helpful team at TrAchem can help with the procurement process.
