LONDON (ShareCast) – (ShareCast News) – Royal Dutch Shell (Xetra: R6C1.DE – news) has agreed to sell its 75% stake in Tongyi Lubricants in China to Huo’s Group and the Carlyle Group for an undisclosed sum. Shell (LSE: RDSB.L – news) said the deal, which is expected to complete by late 2015 or early 2016, is consistent with its strategy to concentrate its Downstream footprint on a smaller number of assets and markets where it can be most competitive.
Shell’s other recent Downstream divestments include the sale of Downstream businesses in Australia and Italy and a number of retail sites in the UK.
Shell has also agreed the sale of its marketing business in Denmark and Norway and its liquefied petroleum gas businesses in France. In July 2015, Shell announced the sale of its shareholding in Showa Shell in Japan to Idemitsu.
Tongyi is a joint venture between Shell and Huo’s Group, which is a Chinese lubricant supplier.
Herman Chang, managing director of the Carlyle Asia buyout team, said: “Carlyle’s investments heavily focus on opportunities driven by the rising middle class in China. The lubricants industry is a growing market in China due to increasing auto penetration. Tongyi is well positioned to tap the market’s potentials with its strong brand, extensive nationwide sales network and experienced team.” At 09:47, Shell shares were up 1.2% at 1,907.50p.