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ADNOC Distribution has entered into a definitive agreement to acquire 100% of the share capital of Shell Downstream South Africa (SDSA) from Shell South Africa Holdings in a deal with an implied enterprise value of about $1 billion.
The acquisition, which is subject to regulatory approvals, is expected to be completed in 2027, the ADX-listed company said in a statement on Tuesday.
Following completion of the transaction, ADNOC Distribution expects to sell a 28% stake in SDSA to a local empowerment partner and an Employee Stock Option Plan (ESOP).
The ADNOC subsidiary will ultimately own a majority stake of 72% in SDSA.
As part of the deal, ADNOC Distribution will enter into a long-term brand licensing agreement that will allow it to retain the Shell brand across SDSA’s retail service station network and lubricants business in South Africa.
The proposed acquisition marks ADNOC Distribution’s latest move to expand its international footprint and strengthen its presence in the African downstream energy market.
The deal follows its expansion into Saudi Arabia in 2018 and the acquisition of a 50% stake in TotalEnergies Marketing Egypt in 2023.
The enterprise value of approximately $1 billion is subject to adjustments for net debt and working capital at closing.
ADNOC Distribution expects the deal to increase earnings per share (EPS) by 6% in the first full year after completion.
BofA Securities acted as the sole financial adviser on the deal.
(Writing by Brinda Darasha; Editing by Bindu Rai)
