ADNOC to acquire Shell’s South Africa fuels arm

ADNOC Distribution has entered a definitive agreement to acquire 100% of the share capital of Shell Downstream South Africa from Shell South Africa Holdings. The transaction implies an enterprise value of approximately $1 billion for the business, before adjustments for net debt and working capital. The acquisition represents a major expansion of ADNOC Distribution’s presence in international downstream markets.

The business being acquired includes a network of 580 company- and dealer-owned service stations across South Africa. Alongside retail fuel, the deal also covers wholesale fuel, aviation fuel and lubricants operations, giving ADNOC Distribution access to multiple demand segments in the country’s fuels market.

Shell Downstream South Africa reported fuel volumes of about 3.5 billion liters as of 2025, highlighting the scale of the network ADNOC Distribution is set to acquire. The portfolio also includes 360 convenience stores, positioning the business as a significant player in fuel retail and associated non-fuel retailing.

By integrating both fuel and convenience operations, the acquired business provides ADNOC Distribution with established infrastructure and customer reach. This combination is central to the company’s expectation that the acquisition will contribute meaningfully to future earnings.

ADNOC Distribution expects the proposed acquisition to be value-accretive. The company projects an increase in earnings per share of approximately 6% in the first full year following completion. It also anticipates an internal rate of return in excess of its corporate hurdle rate, framing the deal as a financially attractive deployment of capital.

Completion of the acquisition is expected in 2027, subject to customary regulatory approvals and other closing conditions. Until then, both parties will work through the approval and integration planning processes required to transition ownership of the South African operations.

Following completion, ADNOC Distribution plans to sell a 28% stake in Shell Downstream South Africa to a local empowerment partner and through an employee stock option plan. This step is intended to align the ownership structure with local participation and employee incentive objectives.

ADNOC Distribution will enter a long-term brand licensing agreement to retain use of the Shell brand for retail service stations and lubricants in South Africa. This arrangement allows continuity in branding and customer recognition across the acquired network after the change in ownership.

BofA Securities acted as sole financial advisor to ADNOC Distribution on the transaction. Legal counsel to ADNOC Distribution was provided by A&O Shearman and ENS, supporting the company on the regulatory and contractual aspects of the deal.

To brief the market, ADNOC Distribution has scheduled a conference call for investors and analysts on July 7, 2026 at 3:30pm UAE time. The call is intended to discuss the proposed acquisition, its strategic rationale and its expected financial impact once completed.