Aramco, one of the world’s leading integrated energy and chemicals companies, has, through one of its wholly-owned subsidiaries, signed definitive agreements to acquire a 10% equity interest in UK-based Horse Powertrain Limited, the new global powertrain solutions company, alongside Renault Group, Zhejiang Geely Holding Group, and Geely Automobile Holdings Limited (Geely).
Headquartered in London, Horse Powertrain was last month set up as a joint venture by leading auto groups Renault and Geely.
The new firm will design, develop, produce, and sell all hybrid and combustion powertrain solutions and systems with state-of-the-art technologies including engines, transmissions, hybrid systems and batteries.
A major global player, Horse Powertrain boasts 17 global plants; nine industrial customers in 130 countries, including vehicle manufacturers; five R&D centres as well as a 19,000-strong global workforce.
With a strategic footprint focused on China, Europe, and Latin America, it is expected to have an annual production of five million powertrain units, encompassing a complete portfolio of advanced powertrain technologies for partners around the world.
As per the deal, Aramco will acquire the equity interest in Horse Powertrain in equal parts from Renault Group and Geely, which will each retain 45% equity stakes.
The price to be paid by Aramco at closing, which is subject to customary closing conditions including the receipt of regulatory approvals, will be based on a €7.4 billion ($7.97 billion) enterprise valuation.
According to Aramco, this investment aims to boost its contribution to the global energy transition through the development and commercialization of more efficient mobility solutions.
The agreements also include collaboration arrangements for Aramco and Valvoline on technologies, fuels, and lubricants to collectively improve the performance of Horse Powertrain Limited internal combustion engines (ICE).
Aramco, Renault Group, and Geely share the view that the automotive industry will require a combination of various technologies - including highly efficient ICE, transmissions and hybrid powertrains, alternative fuels such as lower-carbon synthetic fuels and lower-carbon hydrogen, as well as vehicle electrification - to support an orderly energy and mobility transition around the world.
Ahmad O. Al Khowaiter, Aramco Executive Vice President of Technology & Innovation, said: "Our investment is expected to directly contribute to the development and deployment of affordable, efficient, and lower-carbon emission internal combustion engines globally. With Geely and Renault, we plan to leverage our collective expertise and resources to support ground-breaking advances in both engine and fuel technologies."
"With a strong emphasis on innovation, our goal is to provide solutions that can help reduce transport greenhouse gas emissions while meeting the needs of both vehicle manufacturers and motorists," stated Al Khowaiter.
"In securing long-term partnership between Valvoline Global and Horse Powertrain Limited, Renault Group, and Geely in connection with this investment, we are also demonstrating Aramco’s ability to both create and capture value at the global level," he added.
Renault Group CEO Luca de Meo said: "Mitigating carbon in the automotive industry won’t be a solo play. It requires the best players to join forces to open new paths and come up with innovative solutions. That is what’s happening today as we welcome Aramco as a strategic partner in Horse Powertrain Limited. A dream team is born to reinvent the future of ICE and hybrid technologies."
Geely Holding CEO Daniel Li said: "Mitigating greenhouse gas emissions will require global synergies, multi-faceted technological solutions, and the sharing of expertise. With Aramco’s support and expertise in fuel technologies, Horse Powertrain Limited further cements its role as a leader in pioneering low-carbon and carbon-free fuel technology solutions such as methanol and hydrogen."
Horse Powertrain Limited CEO Matias Giannini expressed delight at Aramco joining the group.
"Their expertise in fuels and hydrogen makes them a great partner for us to deliver cutting-edge, lower-emission powertrain solutions, driving our industry’s carbon mitigation efforts forward. Together, we will set new benchmarks for innovation in the automotive sector," he added.-TradeArabia News Service
