Royal Dutch/Shell Group announced yesterday that its Shell Oil Co. would acquire Pennzoil-Quaker State Co. for $1.8 billion, or $22 per share, and assume $1.1 billion of Pennzoil-Quaker State's debt.
Completion of the transaction is subject to approval by Pennzoil-Quaker State stockholders and customary reviews by regulatory agencies in the United States and other relevant jurisdictions. It is expected that the transaction will be completed in the second half of 2002 and be accretive to Shell's earnings and cash flow from the first full year after completion.
In the deal, Shell will get more than 35% of the world's largest lubricants market and 2,100 of Pennzoil's Jiffy Lube oil-change outlets. Shell said it would cut 1,230 jobs, or 15% of the combined workforce, said Shell spokeswoman Kate Hill.
Shell Oil Products US president & CEO Rob Routs said the addition of Pennzoil and Quaker State will "more than replace" its Havoline-branded motor oil, which Shell will lose the right to sell in 18 months after its agreement with ChevronTexaco Corp. ends.
Pennzoil-Quaker State will be integrated with the existing Shell Oil Products US lubricants organization in the United States and will be based in the Houston.