Infineum, the 50:50 UK chemicals joint venture of Shell and ExxonMobil, has tapped Bank of America to run a sale, and its owners aim for a valuation of about $8bn. The sale fits Shell's push to refocus on oil and gas, though the process is early and may not produce a deal.
Infineum, owned by Shell and ExxonMobil, has tapped advisers at Bank of America to run a sale, with the process launching in recent days, according to people familiar with the matter. The owners are aiming for a valuation of about $8bn.
The sale may attract interest from private equity suitors, the people said. They cautioned that the process remains in the early stages and may not result in a transaction.
What Infineum makes
The Oxfordshire-headquartered company was founded in 1999 and generated about $700mn-$800mn of annual EBITDA, one of the people said. EBITDA measures earnings before interest, taxes, depreciation and amortisation.
Infineum makes speciality chemicals. According to the FT, it is a leader in manufacturing "additives for the fuel and lubricant industry", with products sold in 90 countries. The company says its products are used in a third of all vehicles worldwide.
Shell's downstream retreat
Shell said in March last year that it did not feel it was the natural owner of its chemicals portfolio and wanted to reduce its exposure by 2030. The Infineum sale is its latest push to sell downstream assets, alongside other mooted deals for its US and European chemicals businesses, the FT previously reported.
Meanwhile, Shell agreed this year to buy Canadian shale producer ARC Resources for $16.4bn, its largest acquisition for a decade.
Pressure on lubricants
A deal would follow BP's sale of its Castrol lubricants division to Stonepeak last year in a $10bn deal. Lubricants companies face increasing pressure from the rise of EVs, which has reduced the need for engine oil, though growth in hybrid vehicles could limit the demand erosion.
Shell and Bank of America declined to comment.
Source: Financial Times
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