Aramco buys Valvoline unit for $2.6bn

The Saudi Arabian Oil Company, better known as Aramco, has announced the signing of an equity purchase agreement to acquire the global products business of US-based Valvoline Inc for $2.65 billion. 

Valvoline Global Products (VGP) is an independent producer and distributor of premium branded automotive, commercial and industrial lubricants and automotive chemicals.

Aramco said it will benefit from VGP’s manufacturing and distribution network, significant R&D capabilities, strong partnerships with major manufacturers and a 150-year legacy of global brand recognition as it pursues opportunities to extend the brand globally. 

• If Aramco were a country, it would be richer than Italy

It added that the acquisition will complement Aramco’s line of premium branded lubricant products and optimise its global base oils production capabilities. 

Mohammed Y Al Qahtani, Aramco’s senior vice president of downstream, said: “Valvoline’s global products business fits perfectly with Aramco’s growth strategy for lubricants as it will leverage our global base oils production, contribute to our R&D capabilities and strengthen our existing relationships with original equipment manufacturers. 

“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 VGP join the Aramco family as we continue to execute on our ambitious strategy.”

Following the transaction Valvoline will focus on its retail services business which is expected to benefit from a strong balance sheet and a strategy for value creation, including extending its preventative auto maintenance service model to EV owners.

“The sale of global products represents the successful outcome of our strategy to unlock the full, long-term value of our strong but differentiated retail services and global products businesses,” Sam Mitchell, Valvoline CEO, said. 

“We have built two leading businesses that are well-positioned for continued success as they pursue their individual strategic priorities.

“We are pleased that our global products team will have a strategic new home with Aramco to further grow the business while developing the brand into a global lubricants leader.”

Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals.