Leading lubricant brand Valvoline has completed the sale of its global products division to the Saudi oil giant Aramco in a deal worth $2.65 billion in cash.
The global products division is responsible for Valvoline-branded products like the Valvoline Tectyl rust preventative, and its acquisition will facilitate Aramco’s progress in the global lubricants market. In a statement, Aramco Executive Mohammed Y. Al Qahtani said about this:
“This acquisition will advance our international lubricants growth strategy and leverage our global base oils production and R&D capabilities. It also provides an exciting opportunity to strengthen our relationship with original equipment manufacturers worldwide by extending the reach of Valvoline as one of the world’s preeminent lubricant brands.”
Aramco now owns the Valvoline brand for all products around the world, while Valvoline Inc. will retain ownership of the brand for its retail services in most countries in the world, with the exceptions being certain Middle Eastern and North African countries, as well as China.
Valvoline’s CEO, Sam Mitchell, said that it was a “historic day” for the brand, which has existed for more than a century and a half. He said that each of the two businesses would now be able to focus on developing and fulfilling their own strategic growth ambitions.
Some $1.6 billion of the sale’s proceeds will be returned to shareholders through share buybacks over the next 18 months, with the remaining post-tax proceeds being used to either invest in appealing opportunities for growth or reduce the company’s debt.
