The deal expands ADNOC Distribution’s footprint with 580 service stations and over 360 convenience stores.
Abu Dhabi: ADNOC Distribution plans to acquire Shell Downstream South Africa in a transaction with an implied enterprise value of around $1 billion, expanding the UAE-based fuel retailer’s presence in Africa through one of South Africa’s largest service station networks.
The proposed acquisition includes Shell’s downstream retail, wholesale, aviation and lubricants businesses in South Africa. The deal covers 580 company-owned and dealer-operated service stations, making it the country’s third-largest fuel retail network by number of outlets, along with 360 convenience stores.
The transaction is expected to close in 2027, subject to customary regulatory approvals. Once completed, South Africa will become ADNOC Distribution’s fourth operating market, following the UAE, Saudi Arabia and Egypt.
Shell brand to remain
ADNOC Distribution Chief Executive Officer Eng. Bader Saeed Al Lamki said during a wire call on Tuesday that the acquisition marks a new phase in the company’s expansion strategy across Africa.
“We are proud at ADNOC to share this update, which marks an important step in strengthening our fuel retail presence in Africa,” Al Lamki said. “As a reminder, we entered the African market from Egypt in the north, and we are now continuing our expansion across the continent through the south.”
Customers in South Africa are expected to continue seeing the Shell brand at service stations and across lubricants operations, with ADNOC Distribution set to enter into a long-term brand licensing agreement following completion of the transaction.
“Customers will continue to receive their preferred Shell trusted experience and ADNOC Distribution’s operational leadership,” Al Lamki said.
580 stations and aviation fuel business
The acquisition gives ADNOC Distribution immediate scale in a market with an established fuel retail sector, a broad convenience retail network and commercial fuel supply links to key industries.
Shell Downstream South Africa also operates an aviation fuel business that supplies three airports and more than 15 airlines. The company owns and operates six fuel terminals, including one at Island View.
Al Lamki said South Africa offers a strong and transparent regulatory environment, along with “a growing, well-regulated fuel retail sector with strong fundamentals that support sustainable growth.”
The deal will also expand ADNOC Distribution’s exposure to lubricants, wholesale fuel supply and convenience retail, adding new revenue streams beyond traditional service station fuel sales.
Local partner to take 28% stake
ADNOC Distribution plans to sell a 28% stake in the business to a local empowered partner after completion of the acquisition. Al Lamki said the planned partnership reflects the company’s commitment to South Africa’s strategic economic priorities, including energy security, job creation and inclusive economic participation.
The local ownership structure is expected to draw attention from regulators and investors given the scale of the assets involved and the importance of fuel supply to the South African economy.
EPS expected to rise 6%
ADNOC Distribution said the acquisition is expected to deliver an internal rate of return above its investment threshold and increase earnings per share by 6% in the first full year after completion.
Al Lamki said the transaction is expected to create immediate shareholder value through higher net profit following completion, while also supporting potential dividend growth over the longer term.
“This transaction is an important milestone for our company, marking a significant step towards our ambition of becoming a global mobility and convenience retail destination,” Al Lamki said.
He added that the proposed acquisition strengthens ADNOC Distribution’s international platform, diversifies its portfolio and supports its long-term growth strategy.
“By bringing SDSC under ADNOC Distribution’s ownership, we plan to create sustainable long-term value for shareholders, partners, customers and communities alike,” Al Lamki said.
Africa expansion gathers pace
The South Africa deal follows ADNOC Distribution’s earlier expansion into Egypt and comes as the company continues building a broader international retail footprint beyond its home market.
Al Lamki described Shell Downstream South Africa as a financially strong business and a strategic fit for ADNOC Distribution’s growing portfolio.
The acquisition will further strengthen the company’s position in mobility and convenience retail, a sector where fuel retailers are increasingly expanding beyond fuel sales by using service station networks to offer food, beverages, vehicle services and other everyday customer solutions.
