KENYA
Saudi Aramco enters Kenyan market through buy out
Saudi Aramco, one of the largest integrated energy and chemicals companies is set to enter the Kenyan market through the acquisition of Valvoline which has a local presence.
The Competition Authority of Kenya (CAK) gave Aramco Overseas Company, the investment arm of Saudi Aramco, the nod to acquire the Kenyan operations of Valvoline’s Global Products Business (VGP) Holdings LLC as part of the global deal worth $2.65 billion.
CAK approved this acquisition saying it will not affect competition and that the US motor oil and lubricants group remains small in Kenya with annual sales of Sh14.2 million. Aramco is expected to seek a larger share of Kenya’s lubricants sector and also tap into new markets, including fuel importation. This will trigger market shifts in the fuel and lubricants market that is currently dominated by multinational firms such as TotalEnergies, Vivo, the company that sells Shell products and RUBIS.
Valvoline’s Global Products Business acquired by Saudi Aramco deal in lubricants such as brake fluids, gear oils, greases and transmission fluids. During the acquisition of VGP, Mohammed Y. Qahtani, Senior Vice President of Downstream at Saudi Aramco said: “Valvoline’s Global Products business fits perfectly with Saudi Aramco’s growth strategy for lubricants as it will leverage our global base oils production, contribute to our Research & Development (R&D) capabilities and strengthen our existing relationships with Original Equipment Manufacturers (OEMs).”
With the entry of Saudi Aramco in the Kenyan market, the hope is that possible fuel importation by the company will lead to a decrease in the price of fuels which will eventually trickle down to consumers.