ADNOC Distribution has agreed to acquire Shell Downstream South Africa for an implied enterprise value of about $1 billion, expanding the UAE fuel retailer’s presence in Africa as it pursues international growth.
The Abu Dhabi-listed company said on Tuesday it had signed a definitive agreement to buy 100 percent of the South African business from Shell South Africa Holdings. The transaction is expected to close in 2027, subject to regulatory approvals and customary closing conditions.
Following completion, ADNOC Distribution plans to sell a 28 percent stake in the business to a local empowerment partner and an employee stock ownership plan in line with South African ownership requirements.
The acquisition includes Shell Downstream South Africa’s network of about 580 company- and dealer-owned fuel stations, together with its wholesale fuel, aviation, marine and lubricants businesses. The company sold approximately 3.5 billion litres of fuel in 2025 and operates 360 convenience stores across the country.
Chief Executive Officer Bader Saeed Al Lamki said South Africa was attractive because of its scale and regulatory environment.
“South Africa is one of the biggest economies in Africa. I think this is a good destination to do business at,” Al Lamki said in an interview with CNN. “The regulatory framework when it comes to fuel retail is quite transparent and tested over the years.”
He said the company had studied the asset for an extended period before proceeding with the acquisition.
“We’ve been looking at this deal for nearly 2 years, looking at the different aspects of the operational parameters, the financial parameters, the regulatory framework,” he said.
“So we got ourselves to a place where we are comfortable that we can create value, we can continue the journey to serve people of South Africa through this essential service.”
Al Lamki said the transaction would significantly expand ADNOC Distribution’s retail footprint.
“This deal upon completion, we are going to accelerate our operational targets,” he said. “For example, we are going to acquire 580 service stations. This will add to our existing portfolio and will take us immediately from 1,032 stations today to 1,600 stations immediately upon completion.”
He told CNN that the company would also increase its convenience retail presence.
“We’re going to also add some 380 convenience stores, and that will be a growth of 77% in one go upon completion,” he said.
ADNOC Distribution said it would enter into a long-term brand licensing agreement with Shell, allowing it to continue operating retail service stations and lubricants businesses under the Shell brand in South Africa.
The company expects the acquisition to increase earnings per share by about 6 percent in the first full year after completion and generate an internal rate of return above its investment hurdle rate.
Al Lamki said South Africa’s fuel import requirements also created opportunities for the business.
“South Africa is a net importer of fuel, the shutdown refinance over the years. At the moment, they depend on imports into the country,” he said. “Coming with the ADNOC backing our anchor shareholder definitely gives us the ability to supply fuel into South Africa and to meet its growing demand.”
South Africa would become the fourth country in which ADNOC Distribution operates, following its expansion into Saudi Arabia and its acquisition of a 50 percent stake in TotalEnergies Marketing Egypt in 2023.
