Global energy major, Saudi Arabian Oil Company (Aramco) has completed the acquisition of the lubricant manufacturer Valvoline’s global products business for $2.65 billion, through one of its wholly-owned subsidiaries.
With this acquisition, which follows the signing of an equity purchase agreement by the companies announced on Aug 1, 2022, Aramco accelerates its aim to become one of the world’s preeminent integrated, branded lubricants player, Aramco wrote in a statement.
Aramco will now own the Valvoline brand with respect to the products business, and Valvoline Inc. will own the Valvoline brand with respect to its retail services business, the statement noted.
Following the acquisition, both companies plan to work jointly in growing the the Valvoline brand equity globally.
Valvoline Global Operations, which will continue to be headquartered in Lexington Kentucky, is a worldwide leader in automotive and industrial solutions, creating future-ready products and best-in-class services for partners around the globe.
Commenting on the development, Mohammed Y Al Qahtani, Aramco executive vice president of Downstream, said, “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 Global Operations as a preeminent company among multi-national lubricant brands, a position it has proudly held for over a century and a half.”
Agreeing with Sam Mitchell CEO for Valvoline said, “Today, Valvoline Inc. becomes a pure-play, automotive services company with a right-sized capital structure and enhanced capital allocation. Additionally, Valvoline Inc expects to offer significant capital returns to our shareholders through equity buybacks over the next 18 months.
“All this combined allows us to focus our efforts on and further strengthen our brand as a premier auto after-market services provider.”
The acquisition complements Aramco’s growing presence in the premium branded lubricants market space and opens opportunities to enhance the position of the 150+ year-old name globally, providing a foundation for future growth and downstream portfolio integration.