...October 12, 2021 CHICAGO (S&P Global Ratings) Oct. 12, 2021--Valvoline Inc.'s announcement today that it is pursuing a separation of its two businesses, in our view, signals its intent to increase value for its shareholders in an evolving vehicle drivetrain environment by unlocking the higher-growth, expansionary retail services business from the lower-growth, cash-generative global products business. It's not clear which business would remain as the legacy rated entity. While the transaction may ultimately be a credit negative, our rating is unchanged because the initiative is still in its early stages, and there is not enough information to make an assessment. Key rating factors include the legacy rated entity's reduced scale and business diversity compared to the consolidated entity, its competitive position, and prospects for navigating an evolving drivetrain environment, which could over the next decade increasingly comprise electric or other alternative engine technologies. Most of...
