Aramco is closing in on acquiring 10% of Horse Powertrain

Oil giant Aramco has signed definitive agreements to acquire a 10% stake in Horse Powertrain — a joint venture between French carmaker Renault and China’s automaker Geely, according to a joint statement (here and here).

What’s Horse Powertrain? Formally founded in May of this year, the London-based JV was set up to manufacture next-generation powertrain solutions, including internal combustion engines that use alternative fuels such as ethanol, methanol, and hydrogen, as well as full hybrids and long-range plug-in hybrids, according to its website. It currently operates 17 global plants, 5 R&D centers with nine industrial customers in 130 countries, according to the release. It expects to produce some 5 mn powertrain units annually.

What we know: The transaction assigns Horse an enterprise value of EUR 7.4 bn and would see Renault and Geely each retain a 45% stake. Aramco had initially sought a 20% stake in the powertrain technology venture under a preliminary agreement with Renault and Geely last year, according to an earlier statement.

The rationale: The investment would allow Aramco to expand its venture into global energy transition through the “development and commercialization of more efficient mobility solutions.” It will also see it working together with US-based oil refinery Valvoline to develop technologies, fuels, and lubricants that could improve the performance of Horse Powertarin’s internal combustion engines.

What they said: “Aramco’s 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,” Aramco Executive Vice President of Technology & Innovation Ahmad Khowaiter said.

Reinventing the engine? Renault Group CEO Luca de Meo described the acquisition as one that created a “dream team born to reinvent the future of ICE and hybrid technologies.”