By Yousef Saba
ADNOC Distribution ADX:ADNOCDIST, a subsidiary of Abu Dhabi's state oil giant, said on Tuesday it signed a definitive agreement to buy 100% of Shell's LSE:SHEL downstream business in South Africa as it pursues expansion abroad.
The company said the deal had an implied enterprise value of about $1 billion for 100% of the share capital, before adjustments for net debt and working capital at closing.
The deal for Shell Downstream South Africa (SDSA), which includes 580 company- and dealer-owned fuel stations as well as wholesale fuel, aviation and lubricants operations, is expected to close in 2027 and is subject to regulatory approvals, ADNOC Distribution said.
The Abu Dhabi-listed retailer, which is majority owned by ADNOC, is expanding abroad as it seeks to become a global fuel retail and convenience player. South Africa would be its fourth market after the United Arab Emirates, Saudi Arabia and Egypt, which it entered in 2023 by buying a 50% stake in TotalEnergies Marketing Egypt.
The acquisition is expected to boost earnings per share by 6% in the first full year after completion, ADNOC Distribution said.
A 28% stake in SDSA will be sold to a local partner and an employee stock-option plan after closing, in line with South Africa's Broad-Based Black Economic Empowerment legislation, leaving ADNOC Distribution with a 72% majority, it said.
ADNOC Distribution will retain the Shell brand for the retail service stations and lubricants business under a long-term licensing agreement.
"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," CEO Bader Saeed Al Lamki said in a statement.
SDSA had fuel volumes of about 3.5 billion litres and operated 360 convenience stores as of 2025.
BofA Securities was the sole financial adviser to ADNOC Distribution, with A&O Shearman and ENS serving as legal counsel.