ADNOC eyes stake in key Egypt firm

3 min read
ADNOC Distribution will acquire a 50 percent stake in TotalEnergies Egypt for about US$186 million. (WAM)
  • ADNOC Distribution said it will acquire a 50 percent stake in TotalEnergies Egypt for about US$186 million
  • The acquisition will also see the refurbishment of several service stations to full ADNOC branding

ADNOC Distribution, the UAE’s largest fuel and retail distributor, Thursday announced that it will acquire a 50 percent stake in TotalEnergies Egypt (TotalEnergies Marketing Egypt LLC) for about US$186 million, with an additional earn-out of up to US$17.3 million.

The partnership with TotalEnergies, a leading global multi-energy company with a strong brand and successful track record in Egypt, includes a diversified portfolio.

It comprises 240 fuel retail stations, over a 100 convenience stores, over 250 lube changing stations, car washes, wholesale fuel, aviation fuel and lubricant operations.

ADNOC Distribution and TotalEnergies will develop growth opportunities of TotalEnergies Egypt through unlocking value potential and exploring beneficial synergies in fuel distribution, lubricants and aviation businesses driven by economic growth and post COVID recovery.

The acquisition will also see the refurbishment of several service stations to full ADNOC branding, with certain future sites being constructed under the ADNOC brand, offering a robust foothold in a fast-growing fuel retail market in Egypt.

The acquisition is expected to be completed in Q1 2023 pending satisfaction of certain conditions, including customary regulatory approvals.

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Managing Director, Group CEO of the Abu Dhabi National Oil Company (ADNOC), and Chairman of ADNOC Distribution, said, “This acquisition marks a significant milestone in ADNOC Distribution’s international growth story.”

He said, “Egypt is the Arab world’s most populous country and we look forward to entering such a dynamic market.”

He added, “The acquisition is well aligned with the Industrial Partnership for Sustainable Economic Growth between the UAE, Bahrain, Egypt and Jordan and will leverage the strengths of both the UAE and Egypt to boost growth in the related markets.”

Bader Saeed Al Lamki, CEO of ADNOC Distribution, said, “Egypt’s fuel retail market is highly attractive with exciting potential for future growth. Due to its young and expanding population, alongside a series of progressive economic reforms, Egypt has recorded positive GDP growth with a strong outlook.”

He said, “This acquisition by ADNOC Distribution reaffirms our commitment to expand our business in attractive international growth markets.”

He added, “It is a testament to our ability to leverage our experience in both fuel and non-fuel retail, to deploy cash to accelerate our international expansion and to realize natural business synergies and partnership opportunities that allow us to quickly and efficiently enter new and dynamic markets.”

Al Lamki said, “This move aligns with our vision to establish ADNOC Distribution as a regional leader in the fuel distribution sector, support the delivery of our ambitious strategy and unlocks new earnings potential to build long-term shareholder value through the next phase of our growth.”

He further said, “We look forward to providing the best possible service to customers in Egypt, and working with TotalEnergies to accelerate our international expansion in Egypt and beyond.”

Thierry Pflimlin, President Marketing and Services at TotalEnergies, said, “TotalEnergies is pleased to be joining forces with ADNOC Distribution in Egypt. The rich experience of the leading fuel distributor in the UAE will bring substantial added value to TotalEnergies Egypt. We look forward to collaborating with ADNOC Distribution in its international growth strategy.”

The acquisition is another milestone in delivery of ADNOC Distribution’s international growth strategy, after it opened its first stations outside the UAE in Saudi Arabia in 2018, with 55 stations operational across the Kingdom at the end of March 2022.

The company’s ADNOC Voyager lubricants continues to expand the company’s overall international footprint, exporting to 20 countries.