Saudi Aramco plans to buy US blender Valvoline’s global lubricants business for $2.65bn in a move that complements its extensive global base oils production capacity.The blender's global reach, with sales in more than 140 countries outside the US and Canada, complements Aramco’s coverage of base oils supply both geographically and in terms of base oil specifications..Valvoline’s Global Products business fits perfectly with Aramco’s growth strategy for lubricantsMohammed Y Qahtani, Senior Vice President of Downstream at Aramco.“It will leverage our global base oils production, contribute to our R&D capabilities and strengthen our existing relationships with OEMs," Qahtani said.Aramco’s base oils production capacity encompasses plants in US, Saudi Arabia and South Korea. It includes production of Group I, Group II and Group III base oils.The expansion of its lubricants business provides more outlets for those base oils supplies.It also provides a useful hedge.Low base oil prices tend to be detrimental to refiners, but benefit blenders’ margins through lower costs. High base oil prices have the opposite effect.The sale is expected to be completed in late 2022 or early 2023, subject to regulatory approvals.Valvoline’s global sales have accounted for around 60pc of its total revenue in recent years.North America accounted for more than 35pc of global sales over the past year. Asia accounted for around 12pc of the total, Europe around 7pc and Latin America around 4pc.Valvoline sold around 166mn gallons of lubricants in 2021..US blender Valvoline’s Q1 profit falls
Saudi Aramco plans to buy US blender Valvoline’s global lubricants business for $2.65bn in a move that complements its extensive global base oils production capacity.The blender's global reach, with sales in more than 140 countries outside the US and Canada, complements Aramco’s coverage of base oils supply both geographically and in terms of base oil specifications..Valvoline’s Global Products business fits perfectly with Aramco’s growth strategy for lubricantsMohammed Y Qahtani, Senior Vice President of Downstream at Aramco.“It will leverage our global base oils production, contribute to our R&D capabilities and strengthen our existing relationships with OEMs," Qahtani said.Aramco’s base oils production capacity encompasses plants in US, Saudi Arabia and South Korea. It includes production of Group I, Group II and Group III base oils.The expansion of its lubricants business provides more outlets for those base oils supplies.It also provides a useful hedge.Low base oil prices tend to be detrimental to refiners, but benefit blenders’ margins through lower costs. High base oil prices have the opposite effect.The sale is expected to be completed in late 2022 or early 2023, subject to regulatory approvals.Valvoline’s global sales have accounted for around 60pc of its total revenue in recent years.North America accounted for more than 35pc of global sales over the past year. Asia accounted for around 12pc of the total, Europe around 7pc and Latin America around 4pc.Valvoline sold around 166mn gallons of lubricants in 2021..US blender Valvoline’s Q1 profit falls
