Royal Dutch Shell signed an agreement last Friday to sell its 75 percent stake in China-based Tongyi Lubricants to Huo’s Group and The Carlyle Group for an undisclosed sum.
The transaction is expected to be complete by late 2015 or early 2016, subject to regulatory approvals, Shell said.
Tongyi, a joint venture between Shell and Huo’s Group, is a Chinese lubricant supplier with blending plants in Beijing, Xianyang of Shaanxi province and Wuxi of Jiangsu province.
Shell acquired its 75 percent stake from Huo’s Group in 2006.
“The sale is consistent with Shell’s strategy to concentrate its Downstream footprint on a smaller number of assets and markets where it can be most competitive. Shell is committed to growing its lubricants business in China through strong relationships with distributors, collaboration with key vehicle and equipment manufacturers, and the sale of premium products across all sectors,” the company said.
In June 2015, Shell opened a new lubricants blending plant in Tianjin with the capacity to produce 330 million liters of finished lubricants per year, enough to fill more than 65 million cars.
Separately, Shell completed other downstream divestments including the sale of its downstream businesses in Australia and Italy, the sale of a number of retail sites in the UK and the initial public offering of, and further drop downs to, Shell Midstream Partners L.P.
Shell has also agreed to sell its marketing business in Denmark and Norway and its LPG businesses in France, the company said.
In July 2015, Shell announced the sale of its shareholding in Showa Shell in Japan to Idemitsu.