Royal Dutch Shell PLC and Exxon Mobil Corp. have decided against selling Infineum International Ltd., the additives joint venture formed in 1999 through teaming up of the two companies additives divisions.
ExxonMobil Chemical and Shell Chemicals previously announced that they were reviewing strategic options for the Infineum additives joint venture, Shell said in a statement provided yesterday to Lube Report. The companies confirm that this has been completed, and the conclusion from this study is for the shareholders to retain the business.” A Shell spokesperson declined to comment beyond the statement.
A report yesterday in Britain’sFinancial Times estimated the planned Infineum sale in the 1.5 billion to 2 billion pounds (U.S. $3 billion to $4 billion) range. The Financial Times said buy-out firms rumored to have been interested in Infineum included TPG Capital, Cinven, the Carlyle Group, Kholberg Kravis Roberts, Bain Capital, BC Partners, Apollo Management and Vestar Capital Partners. The publication did not cite sources for the information.
According to another report yesterday, by Thomson Financial News, bids were believed to be below Shell and ExxonMobils asking price.
In October 2007, Exxon Mobil Corp. and Royal Dutch Shell PLC confirmed they were undertaking a study of strategic alternatives for Infineum. The companies said the study was part of an ongoing assessment of the Infineum business and its opportunities for growth, restructuring or divestment, depending upon fit with business objectives. In March this year, ExxonMobil Chemical and Shell Chemicals announced they had agreed to evaluate market interest and discuss the possible sale of Infineum with several potential buyers as part of the strategic study.
Formed in January 1999, Infineum is a fifty-fifty joint venture between ExxonMobil and Shell that brought together their respective additives divisions – Paramins and Shell Additives. The joint venture started with 2,000 employees. Infineum is headquartered in Milton Hill, U.K., and has regional business and technology centers in Linden, N.J., the United Kingdom and Singapore. In a December 2004 press release, Infineum referred to itself as a $1.5 billion company. ExxonMobil and Shell do not issue separate earnings reports for the joint venture.
Infineum develops, manufactures and markets lubricant additives used primarily in automotive, heavy-duty diesel and marine engines, along with additives for fuels and refineries. Its customers include oil companies and other lubricant and fuel marketers worldwide. The companys product line includes specialty lubricant additives for two-stroke engines, automotive transmission fluids, gear and industrial oils.