The Alhamrani Group is considering the sale of its approximate two-thirds stake in a lubricant business joint venture with Germany’s Fuchs Petrolub, two banking source said.
The potential sale of the stake in Alhamrani-Fuchs Petroleum Saudi Arabia Ltd. is expected to generate $400-$500 million for the conglomerate with automotive, financial services and building materials operations, the sources said, speaking on condition of anonymity as the matter is not public.
The remaining, approximate one-third stake is held by Fuchs Petrolub which has a right of first refusal on any sale, the sources said. The German firm is not selling its stake in the venture, the sources added.
Alhamrani is near to completing a second round of the bidding process, one of the banking sources said, adding talks have been ongoing for the last six months.
"Interest for the stake is mainly from financial investors in the region. With the second round now nearing completion, the deal may close in the coming weeks," the source said.
Investment bank Rothschild is advising on the sale, according to the sources.
Rothschild declined to comment. Alhamrani Group and Fuchs Petrolub did not immediately respond to requests for comment.
Fuchs Petrolub AG is a Germany-based company engaged in the development, production and supply of lubricants and related products for industry. Its portfolio of products includes lubricants for a range of applications, including engine and gear oils for vehicles and motorcycles.