The Saudi Arabian Oil Company (Aramco) has completed the acquisition of Valvoline’s global products business for $2.65 billion and signed a deal with Geely and Renault Group. 

With the two deals, the state oil giant looks to boost its lubricants business and potentially own a stake in a new powertrain technology company.

In August last year, Aramco signed an equity purchase agreement to acquire Valvoline Global Operations, a 150+ year-old brand with headquarters in Lexington, Kentucky in the US. 

The acquisition of Valvoline Global Operations will support the oil giant's goal to become one of the leading brands in the lubricants market, according to a statement on Thursday. 

Under the Valvoline deal, Aramco will own the brand with respect to the products business. The deal also stipulates that Valvoline will own the brand in connection with its retail services business. 

“This acquisition will advance our international lubricants growth strategy and leverage our global base oils production and R&D capabilities,” said Mohammed Al Qahtani, Aramco Executive Vice President of Downstream. 

“We look forward to welcoming the Valvoline Global Operations employees and brand… into the Aramco family.” 

New business with Geely, Renault 

Also on Thursday, Aramco confirmed it has signed a letter of intent to become a potential minority stakeholder in a new powertrain technology company, to be established by Geely Holding Group and Renault Group.  

With a global network of 17 powertrain plants and five R&D centres worldwide, the planned entity will focus on internal combustion and hybrid powertrain technologies.  

It is envisioned to have a combined capacity of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year, catering to more than 130 countries and regions. 

“This letter of intent represents a new milestone in our ongoing commitment to transportation technologies and presents a platform to support Aramco’s research and development in engine innovation,” said Al Qahtani. 

“Our planned collaboration with Geely and Renault would support the development of powertrains across the automotive industry and aligns with our broader efforts across our global operations.” 

(Reporting by Cleofe Maceda; editing by Seban Scaria) 

Cleofe.maceda@lseg.com