Saudi Arabian oil and energy company Aramco has signed definitive agreements to acquire a 10% equity interest in Horse Powertrain, a new global powertrain solutions company established by Renault and Geely.
The transaction values Horse at €7.4bn (US$7.9bn) enterprise value. Renault Group and Geely will each retain a 45% equity stake in the company.
The investment by Aramco will support the growth of Horse and contribute to the development of competitive powertrains and synthetic fuel solutions.
Matias Giannini, Horse’s CEO, said, “I am delighted that Aramco has joined Horse. Together, we will set new benchmarks for innovation in the automotive sector.”
Horse says it is expected to produce five million powertrain units annually. These units will cover a full range of advanced powertrain technologies for partners worldwide.
Aramco’s investment is intended to enhance its role in the global energy transition by developing and commercializing more sustainable mobility solutions. The agreements also include collaborative arrangements with Valvoline on technologies, fuels and lubricants to improve the performance of Horse’s internal combustion engines (ICE).
Ahmad O. Al Khowaiter, Aramco executive VP of technology and innovation, said, “With a strong emphasis on innovation, our goal is to provide solutions that can reduce transport emissions while meeting the needs of both vehicle manufacturers and motorists. In securing long-term partnership between Valvoline and Horse, 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.”
Aramco, Renault Group and Geely say that decarbonizing the automotive industry requires a combination of technologies, including highly efficient ICE, hybrid powertrains, lower-carbon synthetic fuels, hydrogen and vehicle electrification.
Luca de Meo, Renault Group CEO, said, “Decarbonizing 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.”
Daniel Li, Geely CEO, said, “To achieve net-zero emissions will require global synergies, multi-faceted technological solutions and the sharing of expertise. With Aramco’s support and expertise in fuel technologies, Horse further cements its role as a leader in pioneering low-carbon and carbon-free fuel technology solutions such as methanol and hydrogen.”