Kolkata: Lubricant maker Tide Water Oil (India) Ltd has acquired global rights to the Veedol trademark from BP Plc for an undisclosed amount.
State-controlled Tide Water makes motor oil under the Veedol brand in India. The company can now expand sales of the brand across the world.
Tide Water on Monday reported the purchase of Veedol International Ltd from BP in a regulatory filing. Tide Water chairman and managing director Kallol Dutta declined to share further details.
Veedol was used in the world’s first mass-produced car, Model T Ford, and in the first aircraft to fly around the world, the Graf Zeppelin. BP decided to sell it to focus on its flagship Castrol and other lubricant brands, the firm had said in a February statement.
The US parent of Tide Water, founded in New York in 1887, had introduced the Veedol brand and made it one of the world’s most recalled ones for lubricants. Tide Water US went through a series of takeovers and some of its assets were spun off through 25 years till the mid-1950s until the company ceased to exist by that name. BP got control of the Veedol brand, except in India, when it acquired Burmah-Castrol in May 2000.
BP didn’t till the time of going to press make any statement on the transaction.
Shares of Tide Water gained 1.24% to Rs 6,649.05 on Monday on the Bombay Stock Exchange. The benchmark Sensex rose 0.9% to 16,939.28.
Tide Water US’ 22.12% stake in its erstwhile Indian unit had gone into the hands of Chevron Corp. Chevron-controlled Four Star Oil and Gas Co. sold its stake in 2008-09 as two Indian investor groups snapped up Tide Water’s shares from the stock market expecting the Union government and institutions controlled by it to cash out.
The Union government proposed to sell a 42% stake in Tide Water in 2002, but decided to abandon the plan eventually in September last year. The government controls Tide Water through Andrew Yule and Co. Ltd, a diversified conglomerate, which was nationalized in 1979. Andrew Yule owns a 26.22% stake in Tide Water.
The acquisition of the Veedol trademark outside of India is likely to make Tide Water more attractive to its suitors, said Rajesh Agarwal, head of research at Kolkata-based brokerage Eastern Financiers Ltd.
Kolkata-based businessman Mahendra Kumar Jalan and lubricant maker Standard Greases (Silvassa) Pvt. Ltd own around 15% each in Tide Water. “With the securities market regulator allowing investors to ramp up their holdings to 25% (without having to make an open offer), there could be renewed interest in the stock,” Agarwal said.
Jalan on Monday said the acquisition of the Veedol trademark from BP should augur well for the company in the long run, but refused to make any further comments because he hadn’t studied the transaction yet.