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ADNOC Distribution will buy Shell's downstream South Africa Business

ADNOC Distribution will buy Shell's downstream South Africa Business
ADNOC Distribution will buy Shell's downstream South Africa Business

ADNOC Distribution is a subsidiary owned by Abu Dhabi’s state oil giant. It announced on Tuesday that it had signed a definitive agreement to purchase 100% of Shell’s downstream business in South Africa, as the company pursues its expansion abroad.

The company stated that the implied enterprise value for 100% of the shares capital was about $1 billion, before adjustments for working capital and net debt at closing.

ADNOC Distribution announced that the deal for Shell Downstream South Africa, which includes wholesale fuel, aviation, and lubricants operations as well as 580 company and dealer owned fuel stations, will close in 2027, subject to regulatory approvals.

The Abu Dhabi listed retailer, which is owned by ADNOC in majority, is expanding overseas as it strives to become a major player in fuel retailing and convenience. South Africa will be its fourth market, after the United Arab Emirates, Saudi Arabia, and Egypt, where it bought a 50% stake of TotalEnergies Marketing Egypt in 2023.

ADNOC Distribution stated that the acquisition would boost earnings per share in the first year following completion by 6%.

ADNOC Distribution will retain a 72% stake in SDSA, after the sale of a 28% share to a local partner and employee stock-option plans, according to South Africa's Broad-Based Black Economic Empowerment Act.

ADNOC Distribution has signed a long-term license agreement that will allow it to retain the Shell?brand? for?the retail service station and lubricants businesses.

The CEO Bader Said Al Lamki stated in a statement that the proposed acquisition marked a significant milestone in ADNOC Distribution’s international growth strategy. It also reflected our confidence in South Africa, a well-regulated and high-potential fuel retail sector.

As of 2025, SDSA operated 360 convenience stores and had fuel volumes of about 3.5 billion litres.

A&O Shearman & ENS served as legal counsel to ADNOC Distribution. BofA Securities acted as the exclusive financial advisor.

(source: Reuters)