ADNOC Distribution to acquire South African fuel network in $1 billion deal

ADNOC Distribution will fully acquire Shell Downstream South Africa (SDSA) in a $1 billion deal that will allow the Abu Dhabi company to own its 580 fuel sites.

The proposed acquisition is expected to close in 2027 with an implied enterprise value of approximately $1 billion for 100 per cent of the share capital prior to adjustment for net debt and working capital. 

The agreement also includes ADNOC entering a long-term brand licensing agreement to retain the Shell brand for retail service stations and lubricants businesses in South Africa.

A 28 per cent stake in SDSA is expected to be sold on to a local empowerment partner and Employee Stock Option Plan (ESOP) following completion of the acquisition.

The South African business includes a network of 580 company- and dealer-owned mobility and convenience sites, as well as lubricants, commercial fuels, aviation, and marine businesses.

The acquisition is expected to boost ADNOC's earnings per share by 6 per cent in the first full year after completion.

South Africa represents the fourth country where ADNOC Distribution would operate and follows its acquisition of a 50 per cent stake in TotalEnergies Marketing Egypt in 2023 and the 2018 launch of its retail fuel stations in Saudi Arabia.

“The proposed acquisition marks a significant milestone in ADNOC Distribution's international growth strategy and reflects our confidence in South Africa as a high-potential, well-regulated fuel retail sector," said Eng. Bader Saeed Al Lamki, CEO of ADNOC Distribution.

"We plan to accelerate our international expansion, diversify our platform, and create sustainable long-term value for our shareholders, our partners, and the customers and communities that this business has proudly served for decades," he added.