Big Merger in Latin American Lube Market

Monday’s announcement by Petrobras to partner with Baskem and Ultra Group in a $4 billion deal to buy Ipiranga Group not only increases the gap between Petrobras and its competitors in the Brazilian lubricants market, it also solidifies its bid to become the number one lubricants marketer throughout Latin America, according to industry analysts from Kline & Company, a global business consulting and market research firm specializing in the petroleum and energy industries.
Geeta Agashe, director of the Petroleum & Energy practice for Kline’s research division, says that prior to the acquisition, state-owned Petrobras was running neck-and-neck with its closest competitor, Chevron, which holds its position in Brazil with the Texaco brand. According to Kline’s report, Petrobras held a 22% share of the nearly 1 million metric ton Brazilian market, just four percentage points ahead of Chevron.
“Ipiranga is ranked third in both the commercial automotive and industrial lubes segments,” Agashe says.
“This acquisition will bring Petrobras’s total share to more than 35% in one quick move, widening its margin over Chevron significantly.”
This ambitious expansion has industry analysts speculating about Petrobras’s intentions for the overall Latin American market.
“This news has a lot to do with an increase in the number of gas stations and the fuel side of the equation in Brazil, but it really solidifies Petrobras’s standing as a leader in lubes, positioning them to dominate in the region,” says Agashe.
Established in 1959, Kline & Company, Inc. is a global management consulting and market research firm serving the petroleum and energy, chemicals and materials, consumer products, and life sciences industries.