Saudi Aramco Acquires Valvoline Global Products Business for $2.65bn
2022.08.01 23:57
Saudi Aramco Acquires Valvoline (VVV) Global Products Business for $2.65bn
By Sam Boughedda
Valvoline (NYSE:VVV), the vehicle care products company, announced Monday that it is selling its Valvoline’s Global Products business for $2.65 billion in cash to Saudi Aramco (TADAWUL:2222).
Valvoline said the move will allow it to focus on its retail services business. The company said it will use the estimated $2.25 billion in net cash proceeds to accelerate the return of capital to shareholders, reduce debt and invest in its retail services business.
“After closing, we will focus on our market leading Retail Services business, including further enhancing our growth trajectory and world-class service model. Retail Services will benefit from a strong balance sheet and a clear strategy for value creation, including extending our world-class preventive auto maintenance service model to EV owners, OEMs and fleets as the car parc evolves,” explained Sam Mitchell, Valvoline CEO.
Aramco expects long-term demand for petrochemicals and the deal helps it capitalize on that expectation, building its presence in the sector.
“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 OEMs,” said Mohammed Qahtani, Senior Vice President of Downstream at Aramco.
Despite an initial rise, Valvoline shares closed Monday’s session down 2.7%.
Valvoline stated it expects retail services sales of approximately $1.5 billion in fiscal 2022, an increase of more than 20% from fiscal 2021. It also said it expects preliminary adjusted EPS of $0.58 and preliminary revenue of $957 million in Q3 2022.
