Valvoline ‘Okays’ Billion Dollars Automotive Deal With Saudi Aramco
Aramco is one of the largest and fastest-growing oil companies in Saudi Arabia. Over the years, the Saudi state-owned company has been expanding greatly. This time, however, it is massive. It signed a deal with Valvoline on Monday (August 1, 2022.) According to reports, the deal is worth $2.65 billion in which the Saudi counterpart will acquire transmission fluids, motor & engine oils, and other auto maintenance products from Valvoline. According to the official statement from Aramco, the products of Valvoline are a great fit for the “growth strategy of Aramco.” So, they have come to terms with Valvoline and are all set to kick off a new era of progress by acquiring the auto products of Valvoline.
Similarly, an official statement from Valvoline affirms that they have come to terms and “mutual collaboration” with Aramco. The U.S-based company that has more than 1700 franchises across the country also confirmed that the pricing of Valvoline products would be different for Aramco. As Aramco is all set to acquire a sheer part of the entire company, the transaction will be separate from the retail pricing of Valvoline. However, it is essential to note here that Valvoline has been a leading auto maintenance products manufacturer for over six decades. Till now, this agreement (with Aramco) is the greatest agreement that Valvoline has ever signed.
Nevertheless, the official statement from Valvoline also asserts that this “major breakthrough” will enable them to expand their products – from auto fluids and motor oils to helping electric cars. According to the statement, once the deal is operational, Valvoline will also supply the maintenance products of electric cars and SUVS as well. However, this supply will not be limited to Aramco only. Instead, this service will be available in all the major franchises of Valvoline.
Thus, it is apparent that the deal has come to a logical conclusion based on the mutual interest of both parties. Aramco and Valvoline are both on the same page and are all set to practicalize the deal.
The official statement from Valvoline also affirms that it will use an estimated $2.25 billion to reduce debts and reinvest in the company’s retail business. Similarly, Valvoline will also use a sheer amount of that net cash to return the capital of the shareholders of Valvoline.
However, it is essential to note that once the deal is ‘officially approved,’ Valvoline will still preserve its brand name on its auto products. Nonetheless, this excludes some countries like China and some parts of the Middle East – where Valvoline will not use its brand name on the products.
Similarly, Aramco will own Valvoline products in Saudi Arabia. While there will be the brand name of Valvoline, Aramco will be the one owning these auto products that Valvoline produces.
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