Dubai, August 1 / BNA / Saudi Aramco announced on Monday a $2.65 billion agreement to acquire the global Valvoline Products business, which includes motor oils, transmission fluids, coolants and other auto maintenance products, the Associated Press reported.
Valvoline said the deal would separate its global products from retail service companies, turning it into a purely car service provider. The 150-plus-year-old franchise company operates around 1,700 service centers, with stores throughout the United States offering oil changes and other express services.
Valvolin noted that the deal will also help it accelerate the focus on servicing electric cars. It is already a major supplier of battery fluids to electric vehicle manufacturers.
Valvoline said it expects to use an estimated net cash proceeds of $2.25 billion to return capital to shareholders through share buybacks, debt reduction and investment in the retail service business. The agreement is subject to regulatory approval, expected by the end of 2022 or early next year.
Aramco, the state-owned oil company in Saudi Arabia, has expanded its refining and petrochemical business in the past years.
“Valvoline’s global products business fits perfectly with Aramco’s lubricant growth strategy as it will increase our global production of base oils,” said Mohammed Al-Qahtani, Aramco’s senior vice president of refining and marketing.
Once the agreement is concluded, Valvoline will own its brand name for all retail services globally, with the exception of China and certain countries in the Middle East and North Africa, while Aramco will own the Valvoline brand for all uses of the products globally. Valvoline said it will purchase motor oils and related products from the Global Products business through a long-term supply agreement.
AOQ