ADNOC’s acquires Shell Downstream South Africa assets for R16 billion

Deal includes 580 company and dealer-owned fuel stations, as well as wholesale fuel business

- YOGASHEN PILLAY

ADNOC Distribution announced yesterday that it had entered an agreement that covers the $1 billion (about R16,2bn) acquisition of 100% of Shell Downstream South Africa (SDSA).

ADNOC said that the $1bn was the implied value prior to adjustment for net debt and working capital: “This includes its 580 company and dealer-owned fuel stations, as well as its wholesale fuel, aviation and lubricants operations.”

ADNOC added that the proposed acquisition marks a major step towards ADNOC Distribution’s ambition to become a global mobility and convenience retailer while advancing its fuel retail footprint in Africa.

“The proposed acquisition is projected to boost ADNOC Distribution’s earnings per share by 6% in the first full year after completion and generate an IRR (internal rate of return) in excess of the company’s hurdle rate, delivering immediate shareholder value.”

ADNOC said that building on its track record of international expansions, the group aims to contribute positively to South Africa’s economy. “The acquisition is expected to close in 2027, subject to customary regulatory conditions, other conditions precedent and closing conditions. A 28% stake in SDSA is expected to be sold on to a local empowerment partner and Employee Stock Option Plan (ESOP) following completion of the Proposed Acquisition,” it said.