Spanish oil company Repsol reached an agreement to acquire 40 percent of the Mexican automotive fluids and lubricants company, Bardahl, Repsol announced Monday.
According to the company's statement, the purchase is the largest transaction to date for Repsol’s lubricants unit, and will "significantly" bolster the internationalization strategy of Repsol’s Downstream Unit. "The alliance will allow Repsol to manufacture and sell its lubricants in Mexico through Bardahl, a company with extensive experience and recognition that operates one of Latin America's most modern production plants, located in Toluca," the statement read.
The transaction will create a joint venture with 60 percent owned by Bardahl with completion expected in the third quarter of 2018, once the necessary regulatory authorizations have been granted.
"The new joint enterprise will sell Bardahl- and Repsol-brand lubricants in Mexico, given the complementarity of the two companies in terms of both positioning and distribution channels," Repsol said.
The purchase of 40 percent of Bardahl is part of the growth plan of Repsol’s lubricants business unit, which aims to double its sales volume to reach 300,000 metric tons by 2021, 70 percent of which is set for international trade.
To achieve this objective, it will invest up to €100 million to acquire stakes in lubricant plants, particularly in Latin America and Asia, in countries such as China, Indonesia, and India. According to the statement, Bardahl has a 6 percent market share in Mexico and has the broadest sales network in the country.
"With this transaction, Mexico will become one of Repsol’s main lubricants markets and a production center for these products in Latin America," Repsol said, adding this investment was supported by the company’s plan to increase the number of its service stations across the country, which currently stands at 60 and the first of which was opened last March.
The company plans to invest about €400 million to open between 200 and 250 service stations per year in Mexico through 2022, aiming to achieve a market share between 8 and 10 percent. According to the statement, the transaction is also in line with Repsol’s strategic plan, which aims to invest €15 billion through 2020.
Of this investment, a total of €4 billion will be allocated to new initiatives, especially in the downstream unit, both for the expansion of petrochemicals, service stations, lubricants and trading businesses (€1.5 billion) and for low carbon emissions projects (€2.5 billion).
(Anadolu Agency)
