Saudi Aramco is entering the South American lubricants market after fully acquiring Chilean blender, distributor and retailer Esmax Distribusción SpA. Announced last week, the acquisition is the company’s first downstream retail investment within the continent.
The cost of the acquisition was not disclosed.
State-owned Aramco purchased Esmax from Latin America-focused private equity company Southern Cross Group. Its operations include a lubricant blending plant and distribution terminals, along with retail fuel stations and airport operations.
“Aramco’s planned acquisition of Esmax would be its first downstream retail investment in South America, recognizing the potential and attractiveness of these markets while advancing Aramco’s strategy of strengthening its downstream value chain,” the company said in a press release.
Esmax manufactures a range of lubricants, including motor oils, transmission oils, hydraulic oils and synthetic and semi-synthetic oils from its plant in Maipu, Chile. Its products are made for applications in the mining and transport industries, among others.
The company also distributes Chevron lubricants.
“The acquisition would also further unlock new market opportunities for Valvoline-branded lubricants, following Aramco’s acquisition of the Valvoline Inc. global products business in February 2023,” Aramco said.
The $2.65 billion acquisition of Valvoline’s global products business included its entire line of motor oil products and other retail products.
“This agreement is yet another milestone in our strategy to grow Aramco’s downstream presence globally and expand our retail, lubricants and trading businesses,” said Mohammed Y. Al Qahtani, Aramco downstream president. “We are excited by the opportunities it presents, creating synergies with our extensive trading and manufacturing systems. Moreover, it creates a platform to launch the Aramco brand both in Chile and South America more broadly, unlocking significant potential to capitalize on new markets for our products.”