Saudi Aramco has decided to opt for some retail therapy. News has broken that Aramco has approached Valvoline Inc (VVV) about a potential takeover of its lubricants business, another sign of the oil state's desire to diversify. People close to the deal have stressed that no deal is imminent and that there are no guarantees there will be one. Valvoline has a market value of around $6b after its shares closed up more than 12% on Wednesday following the news being broken.
Valvoline makes engine and automotive products and operates and franchises oil-change service centers around the US. Valvoline said last October that it plans to separate its retail-services business from its global-products operation, which is best known for its lubricants. Revenue from Valvoline's global products unit accounted for about 59% of its overall sales in 2021. Aramco is looking to develop opportunities in refining and petrochemicals, known in the industry as the downstream sector.