Johannesburg: ADNOC Distribution announced that it has entered a definitive agreement to acquire 100 percent of the share capital of Shell Downstream South Africa (SDSA) from Shell South Africa Holdings. The acquisition, valued at approximately $1 billion before adjustments for net debt and working capital, is expected to close in 2027, subject to regulatory approval and customary closing conditions.
According to Emirates News Agency, a 28 percent stake in SDSA is expected to be sold to a local empowerment partner and an Employee Stock Option Plan (ESOP) following the completion of the acquisition. ADNOC Distribution will also enter into a long-term brand licensing agreement to retain the Shell brand for retail service stations and lubricants businesses in South Africa.
Eng. Bader Saeed Al Lamki, CEO of ADNOC Distribution, stated that the acquisition is a significant step in the company's international growth strategy and reflects confidence in South Africa's regulated fuel retail sector. He emphasized the alignment of values and ambitions between SDSA and ADNOC Distribution and the potential for accelerated international expansion and long-term value creation.
SDSA encompasses Shell's downstream business in South Africa, including a network of 580 mobility and convenience sites, and businesses in lubricants, commercial fuels, aviation, and marine sectors. As of 2025, SDSA reported fuel volumes of approximately 3.5 billion liters and operated 360 convenience stores.
The South African fuel retail sector offers growth potential due to investments in transport infrastructure and a growing driving-age population. The country provides a strong regulatory framework that supports sustainable growth and value creation for shareholders.
ADNOC Distribution aims to align with South Africa's economic priorities by focusing on energy security, job creation, and inclusive economic participation through local partnerships. The acquisition is expected to enhance ADNOC Distribution's earnings per share by 6 percent in the first full year after completion and generate an internal rate of return exceeding the company's hurdle rate.
The acquisition marks a milestone in ADNOC Distribution's strategy to expand its fuel retail presence in Africa, following its acquisition of a 50 percent stake in TotalEnergies Marketing Egypt in 2023 and the launch of retail fuel stations in Saudi Arabia in 2018. BofA Securities acted as the sole financial advisor, with legal counsel provided by A and O Shearman and ENS.