Saudi Aramaco on M&A Binge

Saudi Aramco has agreed to purchase the global products division of the 150-year-old motor oil company Valvoline for $2.65 billion.

The Kentucky-based company announced in December that it was going to split the company in two with the global products division which deals in engine maintenance products and retail service throughout the U.S.

Saudi Aramco, which is the world’s leading oil producer providing more than 10% of global supply, has stated that the acquisition will help the company continue its plans to expand into other areas of service, especially into lubricants.

The deal is still in process of receiving regulatory approval, but if approved Valvoline will be able to focus entirely on retail services as they are trying to expand into the electric vehicle market as well. The $2.65 that Valvoline is expected to receive will then be turned around to increase returns to shareholders, reduce debt, and then used to expand its retail services.

If the deal passed regulatory approval, Saudi Aramco will own all Valvoline products globally but the U.S.-based retail services will still be under control by Valvoline itself.

Source: CNBC