Abu Dhabi National Oil Company (ADNOC) Distribution has agreed to acquire Shell Downstream South Africa (SDSA) from Shell South Africa Holdings in a transaction with an implied enterprise value of approximately $1 billion (AED3.67 billion).
The acquisition covers SDSA’s network of 580 company-owned and dealer-operated service stations, as well as its wholesale fuel, aviation fuel, and lubricants businesses. The enterprise value remains subject to adjustments for net debt and working capital, with the transaction expected to close in 2027, pending regulatory approvals and the fulfilment of customary closing conditions.
Following completion of the transaction, a 28% stake in SDSA will be transferred to a local empowerment partner and an employee stock ownership plan.
ADNOC Distribution will also sign a long-term brand licensing agreement that will allow it to retain the Shell brand across South Africa’s retail service stations and lubricants business, ensuring customers continue to receive the existing Shell-branded products and services.
The company further announced plans to appoint a local partner with extensive experience in South Africa’s fuel retail industry and regulatory environment. The partnership will align with the country’s Broad-Based Black Economic Empowerment (B-BBEE) framework while supporting energy security, employment creation, and inclusive economic participation.
Chief Executive Officer of ADNOC Distribution, Bader Saeed Al Lamki, described the acquisition as a significant milestone in the company’s international growth strategy and reaffirmed its confidence in South Africa as an attractive and well-regulated fuel retail market.
Mr. Al Lamki said the transaction would strengthen ADNOC Distribution’s international footprint, diversify its business portfolio, and create sustainable long-term value for shareholders, business partners, customers, and the communities it serves.
According to the company, South Africa’s fuel retail market presents strong growth opportunities, supported by continued investment in transport infrastructure, a growing driving-age population, and a transparent regulatory framework that helps shield profit margins from inflation and foreign exchange volatility.
Abu Dhabi National Oil Company (ADNOC) Distribution expects the acquisition to increase its earnings per share by approximately 6% during the first full year after completion and generate an internal rate of return above its investment benchmark for the fuel and convenience retail business.
Upon completion of the deal, South Africa will become the fourth country in which ADNOC Distribution operates, following its expansion into Egypt through the acquisition of a 50% stake in TotalEnergies Marketing Egypt in 2023 and the launch of its fuel retail operations in Saudi Arabia in 2018.