Shell and ExxonMobil are exploring the sale of Infineum, their 50-50 lubricant and fuel additives joint venture, in a deal that could value the business at about $8 billion.
Founded in 1999 and headquartered in Oxfordshire, United Kingdom, Infineum is one of the “Big Four” developers of lubricant additive packages, alongside Chevron Oronite, Afton Chemical and Lubrizol. Annual earnings before interest, taxes, depreciation and amortization are between $700 million and $800 million, according to press reports, and the company says its products are used in a third of vehicles worldwide and 70% of electric vehicles.
The two owners have appointed Bank of America to advise on the process, which remains at an early stage and may not lead to a transaction, according to a report in the Financial Times.
Shell has said it does not consider itself a “natural owner” of its chemicals portfolio and wants to reduce its exposure to the sector by 2030. ExxonMobil remains active in lubricants through brands such as Mobil 1 and has been reported as a potential bidder for Shell’s U.S. chemical assets.
Geeta Agashe, president of Geeta Agashe & Associates, told Lube Report that Infineum’s established earnings and customer relationships could attract financial investors seeking reliable cash flow. Potential growth areas include fluids for electric mobility, cooling systems for data centers and battery-related materials, she said.
Recent geopolitical disruptions have severely affected base oil supply chains, pushing some lubricant blenders to reformulate products and working with additive suppliers to maintain performance and specifications. This is an environment in which Infineum’s technical capabilities could be valuable, Agashe said.
However, intellectual property might play a key role in the sale, thinks Amy A. Claxton, CEO of My Energy Consulting and Training.
“ExxonMobil and Shell have significant IP involved in Infineum’s additive chemistries for base oils, both predating Infineum and continuing after Infineum’s inception,” Claxton told Lube Report. “As such, a divestment will require careful navigation of legacy technologies and proprietary formulations.”
Claxton said legacy technologies, formulations and refining processes would likely remain with the two parent companies, while ownership of technologies developed by Infineum would transfer to a new owner. Licensing agreements and restrictions would need to be negotiated before either company would be willing to sell its stake.
“I wonder whether this is market testing because of the calming of the ICE phase-out mania,” Trevor Gauntlett, an industry consultant and Shell alumnus, told Lube Report. “There’s an opportunity to generate cash early.”
Infineum reorganized in 2024 as a specialty chemicals company, with one business unit focused on internal combustion engines and another on electrified drivetrains and battery-related projects. In the same year, its accounts filing in the United Kingdom warned that declining engine use could affect profitability, according to Jim Puckace of Bluetigre Consultants. The accounts cover only part of the wider business, excluding operations in the United States, Singapore and four other businesses.
Puckace estimates that the reported $8 billion valuation represents about 10 to 11.4 times annual earnings before interest, taxes, depreciation and amoritzation. NewMarket, the listed owner of Afton Chemical, trades at about 11 to 12 times earnings, he said. Berkshire Hathaway paid roughly seven times earnings for Lubrizol in 2011, according to Puckace.
Infineum’s owners previously explored a sale in 2007 and 2008. The Financial Times reported an asking price of £1.5 billion to £2 billion at the time, but bids fell short of expectations, Puckace pointed out.
The joint venture’s history also includes an early regulatory intervention. When Exxon and Shell combined their additives businesses in 1998, the European Commission and the U.S. Federal Trade Commission scrutinized their position in viscosity index improvers, polymers that help lubricants maintain viscosity across a range of temperatures. Exxon had to sell its viscosity index improver business to Chevron Oronite before Infineum could proceed.
Later cases include the FTC’s 2009 action to unwind the purchase by Lubrizol of Lockhart’s rust inhibitor business. Infineum abandoned a proposed $240 million acquisition involving Entegris in 2023 after the FTC issued a second request for information, Puckace said.