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A vehicle passes a Shell gas station in Wijchen, Netherlands, April 13, 2026. REUTERS\/Piroschka van de Wouw<\/p>\nKey Points
\nShell\u2019s South Africa downstream unit has enterprise value around $1 bln before debt, working capital adjustments
\nMarks ADNOC Distribution\u2019s fourth market after UAE, Saudi Arabia and Egypt
\nDeal to expand network by 55% to about 1,600 stations, makes ADNOC Distribution third-largest player
\nExpected to boost earnings per share by 6%, EBITDA by 13% in first full year
\nCEO says company \u201cstill hungry for growth,\u201d eyes Southeast Asia<\/p>\n
A vehicle passes a Shell gas station in Wijchen, Netherlands, April 13, 2026. REUTERS\/Piroschka van de Wouw<\/p>\n
DUBAI, July 7 (Reuters)\u00a0\u2013\u00a0ADNOC Distribution\u00a0said on Tuesday it had agreed to buy Shell\u2019s\u00a0downstream business in South Africa for an implied enterprise value of about $1 billion, marking its largest overseas acquisition yet as it expands beyond the Gulf.<\/p>\n
The acquisition of Shell Downstream South Africa, which includes 580 fuel stations as well as wholesale fuel, aviation and lubricants operations, would expand ADNOC Distribution\u2019s network by 55% to about 1,600 sites and increase fuel volumes by 20%.<\/p>\n
South Africa would become ADNOC Distribution\u2019s fourth market after the United Arab Emirates, Saudi Arabia and Egypt, and is a step towards its ambitions to become a global fuel retail and convenience operator.<\/p>\n
ADNOC Distribution\u2019s CEO Bader Saeed Al Lamki said the company was \u201cstill hungry for growth\u201d, adding that Africa and Southeast Asia are among its target regions.<\/p>\n
The company expects the deal to increase earnings per share by 6% and earnings before interest, taxes, depreciation and amortisation by around 13% in the first full year after closing.<\/p>\n
The deal could lead to higher payouts for shareholders, Al Lamki said. ADNOC Distribution\u2019s dividend policy through 2030 guarantees a minimum of $700 million a year, or 75% of net income if that is higher.<\/p>\n
SOUTH AFRICA CONSOLIDATING<\/p>\n
ADNOC Distribution enters a South African fuel retail market that has consolidated rapidly around commodities-trader-backed owners. Vitol\u2019s Vivo Energy became market leader after buying a majoirty of Engen from Malaysia\u2019s Petronas in 2024, while Glencore has run the country\u2019s second-biggest network since backing the acquisition of Chevron\u2019s Caltex stations in 2018.<\/p>\n
A 28% stake in SDSA will be sold to a local partner and an employee stock-option plan after closing, in line with South Africa\u2019s Broad-Based Black Economic Empowerment legislation, leaving ADNOC Distribution with a 72% majority, it said.\u00a0SDSA had fuel volumes of about 3.5 billion litres and operated 360 convenience stores as of 2025.<\/p>\n
ADNOC Distribution said South Africa\u2019s regulated fuel pricing framework offers gross margins per litre comparable to the UAE, insulating returns from inflation and currency volatility.<\/p>\n
Before the U.S.-Israeli war with Iran, about 60% of the country\u2019s refined product demand was met by imports, largely from the Gulf.<\/p>\n
\u201cWe are,\u00a0first and foremost, a convenience and retail company,\u201d\u00a0Al Lamki said when asked if his company would invest in refining, adding it\u00a0would focus on the retail network, convenience stores, aviation, B2B and lubricants.<\/p>\n
ADNOC Distribution will retain the Shell brand for the retail service stations and lubricants business under a long-term licensing agreement.<\/p>\n
\u201cShell has been in South Africa for more than 120 years. Customers are used to it,\u201d Al Lamki said. \u201cWe believe there\u2019s value in retaining this brand.\u201d<\/p>\n