March 9 (Reuters) - Shell said on Monday it will sell its subsidiaries Jiffy Lube and Premium Velocity Auto to an affiliate of private equity firm Monomoy Capital Partners for $1.3 billion, as the oil
Shell to offload Jiffy Lube to Monomoy Capital for $1.3 billion
Shell's Divestment of Jiffy Lube: Key Details and Strategic Implications
Overview of the Sale
March 9 (Reuters) - Shell said on Monday it will sell its Jiffy Lube lubricant shop chain to an affiliate of private equity firm Monomoy Capital Partners for $1.3 billion, as the oil major continues to shed non-core assets under CEO Wael Sawan's strategy to focus on higher-return businesses.
The sale also includes Premium Velocity Auto, the second-largest Jiffy Lube franchise.
Transaction Structure and Agreements
Pennzoil Quaker State Company’s Role
Pennzoil Quaker State Company, a wholly owned subsidiary of Shell USA that comprises Shell's U.S. lubricants business, entered the agreement, which also includes a long-term lubricants supply agreement.
Shell’s Strategic Rationale
"By capitalizing on a strong market opportunity, this divestment allows us to monetize an asset that is not central to Shell's lubricant's portfolio in the U.S. and reinvest in opportunities that generate higher returns," said Shell executive Machteld de Haan.
Background on Jiffy Lube and Premium Velocity Auto
Jiffy Lube’s Market Position
Jiffy Lube, an American chain of automotive oil change specialty shops founded in 1971, has been a subsidiary of Shell since 2002. The chain makes up about 6.5% of Shell's U.S. and Canada total lubricants volume. Premium Velocity Auto has 360 locations operating in 20 U.S. states.
Shell’s Broader Strategic Shift
CEO Wael Sawan’s “Value Over Volume” Approach
Sawan, who took the helm in 2023, has pursued a "value over volume" strategy, scrapping offshore wind and hydrogen projects as well as Nigerian onshore operations, a Singapore chemicals park and retail networks in Indonesia and Mexico.
Industry Context and Competitor Moves
Rival BP in December agreed to sell a 65% stake in lubricants business Castrol to Stonepeak for $6 billion.
Shell’s Retained Lubricants Business
Brands and Operations Maintained
Shell will retain its Pennzoil, Quaker State, Rotella and other Shell lubricant brands, along with manufacturing, marketing and distribution of lubricants in the U.S. and Canada.
Reporting Credits
(Reporting by DhanushVignesh Babu in Bengaluru; Editing by Sahal Muhammed)
