M&As: Aramco completes US$2.65 bn acquisition of Valvoline lubricants biz; Solvay to sell entire stake in RusVinyl to partner Sibur for EUR430 mn

Saudi Arabian Oil Company (Aramco) has completed the acquisition of the Valvoline Inc’s global products business for US$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 last year, Aramco accelerates its aim to become one of the world’s integrated, branded lubricants players.

Aramco will now own the 157-year old Valvoline brand with respect to the products business, and Valvoline Inc. will own the Valvoline brand with respect to its retail services business. Aramco and Valvoline Inc. plan to work together to continue to grow the Valvoline brand equity globally.

Valvoline Global Operations, which will continue to be headquartered in Lexington Kentucky, is a global supplier of automotive and industrial solutions, creating future-ready products and best-in-class services for partners around the globe.

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. We look forward to welcoming the Valvoline Global Operations employees and brand, one of the most recognised names in the industry, into the Aramco family. At the same time, we expect Aramco’s global network to provide an unmatched foundation for this historic brand’s next chapter of development.”

Sam Mitchell, Valvoline Inc. CEO, said: “Valvoline 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.

In other news, Belgian chemical firm Solvay says it has agreed on final terms to sell its 50% stake in the RusVinyl joint venture to its joint venture partner Russian petchem firm Sibur. Upon completion, the divestment will represent another important milestone in the transformation of Solvay’s portfolio, and will mark the final step in the company’s strategy to exit its cyclical global polyvinyl chloride (PVC) operations.

The agreement is based on a purchase price for Solvay’s 50% stake of around EUR430 million. A capital loss of around EUR175 million will be recogniSed on completion mainly reflecting the crystallisation of historic currency translation balances.

The completion of the transaction is expected to take place towards the end of the first quarter 2023.

(PRA)

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