Aramco to Acquire 10% Stake in Renault-Geely’s HORSE Powertrain

Aramco, through a wholly owned subsidiary, signed definitive agreements on June 29, 2024, to acquire a 10% equity interest in HORSE Powertrain Limited, a new global powertrain solutions company formed by Renault Group and Zhejiang Geely Holding Group. The announcement, released via the Saudi Press Agency, marks a significant step in Aramco’s strategy to support a lower-carbon mobility future while advancing the Kingdom’s economic diversification goals.

Context and Background

HORSE Powertrain Limited was established on May 31, 2024, and is headquartered in London, United Kingdom. The company focuses on developing advanced powertrain technologies, including internal combustion engines (ICEs), transmissions, and hybrid systems, aimed at reducing emissions across the global automotive industry.

Aramco’s investment aligns with its broader commitment to the energy transition, as outlined in Saudi Vision 2030. By partnering with Renault Group and Geely, Aramco seeks to accelerate the development of more efficient mobility solutions, leveraging its expertise in fuels, lubricants, and research and development.

Key Details

Under the agreements, Aramco will acquire equal parts of its 10% stake from Renault Group and Geely, which will each retain 45% equity. The transaction is based on a €7.4 billion enterprise valuation and is subject to customary closing conditions, including regulatory approvals.

The collaboration also includes arrangements for Aramco and Valvoline to work with HORSE Powertrain Limited on technologies, fuels, and lubricants to enhance ICE performance. Ahmad O. Al Khowaiter, Aramco’s executive vice president of technology & innovation, stated, “Aramco’s investment is expected to directly contribute to the development and deployment of affordable, efficient, and lower-carbon emission internal combustion engines globally.”

Luca de Meo, Renault Group chief executive, welcomed Aramco as a strategic partner, noting that “a dream team is born to reinvent the future of ICE and hybrid technologies.” Daniel Li, Geely Holding chief executive, emphasized that the partnership will advance low-carbon and carbon-free fuel solutions such as methanol and hydrogen. Matias Giannini, HORSE Powertrain Limited chief executive, highlighted Aramco’s expertise in fuels and hydrogen as key to delivering cutting-edge, lower-emission powertrain solutions.

Implications and Impact

This investment underscores Saudi Arabia’s active role in shaping the global energy transition. By supporting the development of lower-carbon technologies, Aramco is helping to bridge the gap between traditional energy and sustainable mobility, ensuring that the automotive industry can meet global climate goals without disrupting economic growth.

For the Kingdom, the deal reinforces its position as a leader in energy innovation and highlights the success of Vision 2030 in fostering international partnerships. It also demonstrates Aramco’s ability to create and capture value at a global scale, as noted by Al Khowaiter.

Vision 2030 Alignment

This acquisition directly supports Saudi Vision 2030’s objectives of economic diversification and global engagement. By investing in cutting-edge powertrain technologies, Aramco is contributing to a sustainable future while strengthening the Kingdom’s role as a key player in the global energy landscape. Through such initiatives, Saudi Arabia continues to drive innovation and collaboration that benefit both the region and the world.

20 Questions

Q1. What did Aramco agree to acquire on June 29, 2024?

A1. Aramco signed definitive agreements to acquire a 10% equity interest in HORSE Powertrain Limited, a global powertrain solutions company formed by Renault Group and Geely.

Q2. Where is HORSE Powertrain Limited headquartered?

A2. HORSE Powertrain Limited is headquartered in London, United Kingdom, and was incorporated on May 31, 2024.

Q3. What is the enterprise valuation of HORSE Powertrain Limited?

A3. The enterprise valuation is €7.4 billion, based on which Aramco’s investment price will be determined at closing.

Q4. How will Aramco’s 10% stake be allocated?

A4. Aramco will acquire the 10% stake in equal parts from Renault Group and Geely, which will each retain 45% equity stakes.

Q5. What are the closing conditions for the deal?

A5. The deal is subject to customary closing conditions, including the receipt of regulatory approvals from relevant authorities.

Q6. What is the purpose of Aramco’s investment?

A6. The investment aims to enhance Aramco’s contribution to the global energy transition by developing and commercializing more efficient mobility solutions.

Q7. Who are the other partners in HORSE Powertrain Limited?

A7. Renault Group, Zhejiang Geely Holding Group, and Geely Automobile Holdings Limited are the other partners, with Renault and Geely each holding 45%.

Q8. What collaboration arrangements are included in the agreements?

A8. The agreements include collaboration for Aramco and Valvoline on technologies, fuels, and lubricants to improve the performance of HORSE Powertrain’s internal-combustion engines.

Q9. What views do Aramco, Renault, and Geely share about the automotive industry?

A9. They agree the industry will need a combination of technologies, including efficient ICE, transmissions, hybrid powertrains, alternative fuels, and vehicle electrification, for an orderly transition.

Q10. What is HORSE Powertrain Limited’s mission?

A10. Its mission is to lead the race towards lower-emission next-generation technologies, such as synthetic fuels and hydrogen, to support global carbon mitigation efforts.

Q11. How can Aramco’s capabilities support HORSE Powertrain Limited?

A11. Aramco’s global R&D centers focus on synthetic fuels, hydrogen, and ICE optimization, which can help develop more sustainable and accessible lower-carbon solutions.

Q12. What did Ahmad O. Al Khowaiter say about the investment?

A12. He said the investment is expected to directly contribute to the development and deployment of affordable, efficient, and lower-carbon emission internal combustion engines globally.

Q13. What did Luca de Meo say about the partnership?

A13. He said mitigating carbon in the automotive industry requires collaboration, and welcomed Aramco as a strategic partner in HORSE Powertrain Limited.

Q14. What did Daniel Li say about the partnership?

A14. He said mitigating greenhouse-gas emissions requires global synergies, and with Aramco’s support, HORSE Powertrain will pioneer low-carbon fuel solutions like methanol and hydrogen.

Q15. What did Matias Giannini say about Aramco joining?

A15. He expressed delight, noting Aramco’s expertise in fuels and hydrogen makes them a great partner to deliver cutting-edge, lower-emission powertrain solutions.

Q16. How does this investment align with Saudi Vision 2030?

A16. It supports economic diversification and global engagement, reinforcing Saudi Arabia’s role in energy innovation and sustainable mobility.

Q17. What role does Valvoline play in the collaboration?

A17. Valvoline will collaborate with Aramco on technologies, fuels, and lubricants to improve the performance of HORSE Powertrain’s internal-combustion engines.

Q18. What are the expected benefits for the automotive industry?

A18. The partnership aims to develop more efficient, lower-carbon powertrain solutions, helping reduce transport greenhouse-gas emissions while meeting manufacturers’ and motorists’ needs.

Q19. When was HORSE Powertrain Limited formed?

A19. HORSE Powertrain Limited was formed on May 31, 2024, by Renault Group and Geely, with headquarters in London, United Kingdom.

Q20. What does this deal signify for Aramco’s global strategy?

A20. It demonstrates Aramco’s ability to create and capture value globally, while contributing to a lower-carbon future through strategic partnerships and technological innovation.

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