(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.
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.
"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.
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.
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.
Rival BP in December agreed to sell a 65% stake in lubricants business Castrol to Stonepeak for $6 billion.
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 by DhanushVignesh Babu in Bengaluru; Editing by Sahal Muhammed
Source: Reuters