"ADNOC Distribution" A definitive agreement is entered into to acquire "Shell Downstream South Africa"

ABU DHABI, 7 JULY / WAM / ADNOC Distribution announced today that it has concluded a final agreement with Shell South Africa Holding Company to acquire the entire capital of Shell Downstream South Africa. This deal is hereinafter referred to as the “Proposed Acquisition.”

The estimated value of the company subject to the proposed acquisition is $1 billion based on the acquisition of 100% of the capital, before calculating adjustments to net debt and working capital. The proposed deal is expected to be completed during the year 2027, after regulatory approvals and usual closing conditions are met. Following completion of the proposed transaction, a 28% stake in Shell Downstream South Africa is expected to be sold to a local partner, as required by South Africa’s inclusive economic empowerment legislation.

Following completion of the proposed acquisition, ADNOC Distribution will enter into a long-term license agreement to use the brand, allowing it to continue operating its service stations and lubricants business in South Africa under the Shell brand.

Upon completion of the deal, customers will continue to benefit from the preferred and reliable experience they have become accustomed to, under the supervision of ADNOC Distribution.

Engineer Badr Saeed Al Lamki, CEO of ADNOC Distribution, said on this occasion that the proposed acquisition deal represents an important milestone in ADNOC Distribution’s strategy for international expansion, and confirms the company’s confidence in South Africa as a promising market characterized by a solid regulatory framework in the fuel marketing sector.

He added that Shell Downstream South Africa is characterized by financial strength and a well-established position in the local economy, in addition to its values ​​and goals being closely aligned with ADNOC Distribution’s vision and strategic objectives.

He explained that the goal of including Shell Downstream South Africa is to accelerate ADNOC Distribution’s international expansion and diversify its operational platforms, thus enhancing its ability to achieve sustainable and long-term value for its shareholders and partners, as well as for the customers and communities in which this company has operated for decades.

Shell Downstream South Africa represents Shell’s marketing and distribution business in South Africa, and its business portfolio includes a network of approximately 580 fuel stations, owned by the company or managed through authorized agents.

Its operations extend to include lubricants, commercial fuels, and aircraft and ship fuels. According to 2025 data, the company’s fuel sales amounted to about 3.5 billion liters, while it operates 360 retail stores.

More information about Shell Downstream South Africa can be found at www.shell.co.za.

South Africa’s retail fuel distribution sector has well-established and attractive fundamentals, supported by strong investments in critical transport infrastructure and a continued growth in the driving-age population base, enhancing the long-term prospects for fuel demand.

The South African business system also benefits from a strong and transparent regulatory framework for the retail fuel distribution sector, and pricing structures designed to protect profit margins from inflation and exchange rate fluctuations. Together, these factors contribute to creating an operating environment that supports sustainable growth, outstanding performance, and enhancing the ability to generate strong cash flows, which supports the creation of long-term value for shareholders.

Following the completion of the proposed acquisition deal and the completion of the sale of a minority stake to a local partner, ADNOC Distribution affirmed its commitment to contribute to supporting the economic and strategic priorities of South Africa, with a focus on enhancing its role in ensuring energy security, creating job opportunities, and expanding the scope of comprehensive economic participation through the local partner. The company will also work to select a partner characterized by a deep understanding of the South African market, its regulatory framework, and local operating requirements, in a way that ensures compatibility with the objectives of comprehensive economic empowerment legislation.

The proposed acquisition is expected to support the creation and enhancement of value for ADNOC Distribution, by contributing to an increase in earnings per share by approximately 6% during the first fiscal year of its completion, in addition to achieving an internal rate of return that exceeds the minimum target for the company’s business in the fuel distribution and retail sectors.

The proposed acquisition, upon completion, will represent a milestone in ADNOC Distribution’s international expansion strategy, enhancing its presence in the fuel distribution sector in Africa.

South Africa will be the fourth market in which ADNOC Distribution begins its operations, and is an extension of its expansion efforts, which included the acquisition of a 50% stake in Total Energy Marketing Egypt LLC. In 2023, and the opening of its first station outside the UAE in the Kingdom of Saudi Arabia in 2018.

BofA Securities acted as the exclusive financial advisor for the deal, and A&O Sherman and ACE provided relevant legal advice to ADNOC Distribution.

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