Shell Buys Pennzoil-Quaker
HOUSTON -- Shell Oil Co., the U.S. affiliate of Royal Dutch/Shell, agreed yesterday to acquire Pennzoil-Quaker State Co., the largest manufacturer of automobile lubricants and other car products, for about $1.8 billion in cash.
With both boards approving the deal, Shell expects the transaction to proceed smoothly, with completion set for the second half of this year, The New York Times reported.
Shell, which predicts pretax benefits of $140 million a year by 2004, has taken a patient approach as major competitors like Exxon Mobil Corp. and BP Plc have engaged in aggressive consolidation.
In addition to its famed lubricant line that includes Pennzoil and Quaker State motor oils, Pennzoil also owns Jiffy Lube, a franchise of oil-change shops.
The move comes as Shell has spent $500 million to rebrand its Texaco service stations to the Shell moniker. The purchase of Pennzoil thrusts Shell into a "very competitive, very tough business," Kate Warne, an analyst with the brokerage house Edward Jones, told The Times. "I think of Pennzoil as more of a consumer products business than an oil company."
With both boards approving the deal, Shell expects the transaction to proceed smoothly, with completion set for the second half of this year, The New York Times reported.
Shell, which predicts pretax benefits of $140 million a year by 2004, has taken a patient approach as major competitors like Exxon Mobil Corp. and BP Plc have engaged in aggressive consolidation.
In addition to its famed lubricant line that includes Pennzoil and Quaker State motor oils, Pennzoil also owns Jiffy Lube, a franchise of oil-change shops.
The move comes as Shell has spent $500 million to rebrand its Texaco service stations to the Shell moniker. The purchase of Pennzoil thrusts Shell into a "very competitive, very tough business," Kate Warne, an analyst with the brokerage house Edward Jones, told The Times. "I think of Pennzoil as more of a consumer products business than an oil company."