Valvoline lube unit sale set for early 2023

US automobile maintenance provider Valvoline expects to complete the sale of its global lubricants business to Saudi Aramco early next year.

The company announced the $2.65bn sale in August.

Until the sale, Valvoline’s business comprised of the global lubricants unit and its automobile maintenance retail service.

Valvoline planned to use most of the anticipated net proceeds to accelerate the return of capital to shareholders through share repurchases, and the rest to reduce debt.

Valvoline’s lube business has sales in more than 140 countries outside the US and Canada. The unit’s sales accounted for around 60pc of the company’s total sales in recent years.

Valvoline forecast that the company would generate faster sales growth and higher margins following the separation of the global lubricants unit.

Following the sale, Valvoline will have a supply agreement with the global products unit with pricing based on a cost-plus agreement.

Valvoline was itself separated from global specialty chemicals producer Ashland Global Holdings in 2017.