Petroleum brand Valvoline struck a deal this week with Saudi Arabia’s Aramco, which sees the American company selling its global products business for $2.65 billion.
The deal sees Aramco taking ownership of Valvoline’s products used globally, while Valvoline would retain its global rights to the brand name itself for use in retail services, except in China and certain countries in the Middle East and Africa.
Valvoline’s retail services business primary consist of oil-change and lube centers, which will for the most part stay under the American brand’s purview.
“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,” explained Mohammed Y. Al Qahtani, Aramco Senior Vice President of Downstream.
“Valvoline’s brand strength and global recognition will continue to be developed and extended under Aramco’s stewardship. We are also very excited to have the outstanding people of VGP join the Aramco family as we continue to execute on our ambitious strategy.”
The effect of this acquisition though is that Aramco will be able to sell its own lubrication products at a further step of remove from its Saudi government ownership, with the added benefit of a trusted name in the oil-product marketplace.
Saudi Arabia has been active in changing the public perception of its government-owned assets and businesses, as just last year Aramco intwined itself with Valentino Rossi and the VR46 squad – a deal that quickly dissolved after its announcement.
It would seem now that the Valvoline brand acquisition is just another step in The Kingdom’s growth into western society, though it will be interesting to see whether it has the intended result or not.