DUBAI, United Arab Emirates (AP) – Saudi Aramco on Monday announced a $2.65 billion agreement to acquire Valvoline’s global products business, which includes motor oils, transmission fluids, coolants and other automotive maintenance products. .
Valvoline said the transaction will separate its global products from its retail services business, transforming it into an entirely automotive service provider. The more than 150-year-old company operates and franchises approximately 1,700 service centers, with stores across the United States providing oil changes and other expedited services.
Valvoline noted that the deal will help it focus on servicing electric vehicle cars. It is already a major supplier of battery fluid to electric vehicle manufacturers.
Valvoline said it expects to use the estimated $2.25 billion of net cash proceeds to return capital to shareholders through share repurchases, reduce debt and invest in its retail services business. The agreement is subject to regulatory approval, which is expected by the end of 2022 or early next year.
Saudi Arabia’s state-run oil company Aramco has been expanding its downstream business in the past years.
“Valvoline’s global products business fits perfectly with Aramco’s growth strategy for lubricants as it will leverage our global base oil production,” said Mohamed Al-Qahtani, Senior Vice President, Downstream, Aramco.
Once the agreement is reached, Volvoline will own its name brand for all retail services globally, except in China and some countries in the Middle East and North Africa, while Aramco will own the Volvoline brand for all product uses globally. will be the owner. Valvoline said it will purchase motor oil and related products from the global products business through a long-term supply agreement.