Ultrapar Participações S.A. announced that its subsidiary Ipiranga Produtos de Petróleo S.A. has entered into a joint venture agreement with Chevron Brasil Lubrificantes Ltda. to create a new company in the lubricants business.
Under the agreement, the joint venture will be formed by Ipiranga’s and Chevron’s lubricants operations in Brazil. Ipiranga and Chevron will own 56% and 44%, respectively, of the joint venture’s capital.
The joint venture will combine two highly complementary and experienced companies in this business, aiming at value creation by sharing best practices and strengthening its position in the competitive Brazilian lubricants market. The combination of the two businesses increases the capillarity of the sales channels in Brazil through Ipiranga’s network of 7,241 service stations, 1,473 of which with Jet Oil (Ipiranga’s specialised car care services), as well as through Ipiranga’s and Chevron’s lubricant distributors network.
The joint venture will market lubricants, greases, additives and coolants under Ipiranga and Chevron brands.
In 2015, Ipiranga sold 206,000 cubic metres of lubricants, greases and fluids and recorded revenues of BRL 1.1 billion (USD 340 million). In the same period, Chevron sold 145 thousand cubic metres of lubricants, greases and coolants in Brazil and recorded estimated revenues of BRL 0.9 billion (USD 278 million).
The transaction is subject to approval of the competent regulatory authorities, notably the Brazilian antitrust regulation agency CADE (Conselho Administrativo de Defesa Econômica).