Abu Dhabi’s Adnoc to Buy Shell’s South Africa Fuel Stations

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(Bloomberg) — Abu Dhabi National Oil Co.’s retail unit agreed to buy Shell Plc’s fuel stations in South Africa at a $1 billion enterprise value, giving the Emirati company access to Africa’s biggest economy for the first time.

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Adnoc Distribution will gain control of 580 retail station in the country as well as wholesale fuel, aviation and lubricants operations, it said in a statement Tuesday, confirming an earlier report from Bloomberg News. 

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The deal is expected to close next year, after which the company expects to sell 28% of the business to “a local empowerment partner” and for employee stock options.

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The acquisition is the latest in a wave of M&A that’s made Adnoc and its units among the biggest energy dealmakers in recent years. Backed by billions of dollars of Abu Dhabi’s oil money, the company has picked up natural gas assets from the US to Africa and Central Asia, and snapped up German chemical firm Covestro AG as it looks to expand its influence around the world.

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Adnoc Distribution emerged as the preferred bidder for the Shell portfolio earlier this year after talks with Gunvor Group, one of the world’s biggest independent oil traders, fell through. For Shell, the sale would be a step forward in its plan to sell non-core holdings as it focuses on assets such as those in Canada in a push to sustain oil and gas production in the long-term.

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Adnoc will continue to use the Shell brand for the retail stations and lubricants in South Africa under a long-term brand licensing agreement, according to the statement. The deal is expected to bolster Adnoc Distribution’s earnings per share by 6% in the first full year after completion, it said.

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The sale process, which started in 2024, has progressed despite the conflict in the Middle East bringing large-scale disruption to Adnoc and other major energy companies in the Middle East. 

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Still, Gulf investors have pushed ahead with a string of recent overseas deals, spanning alternative asset managers, private credit and technology platforms. Last month, two of Abu Dhabi’s biggest wealth funds agreed to commit £1.5 billion ($2 billion) to back private equity firm EQT AB’s acquisition of Intertek Group Plc.

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Adnoc’s Distribution’s acquisition will further reshape South Africa’s retail fuel market. Glencore Plc acquired Chevron Corp.’s Caltex-branded stations in 2018, while Vitol Group’s Vivo Energy last year bought Engen Ltd., the nation’s largest fuel-station chain. Shell itself sold South Africa’s largest refinery to the state-owned Central Energy Fund after the oil major had stopped processing there in 2022.

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