UAE state oil giant ADNOC is nearing a $1 billion acquisition of Shell South African downstream business, a deal that would hand the Abu Dhabi company control of about 600 fuel stations and deepen its presence in Africa’s largest fuel market.
The latest development marks a significant step forward in negotiations first reported earlier this year.
While earlier reports indicated that Shell was in advanced talks to sell the business to ADNOC, it was reported that the two companies are preparing to announce a definitive agreement in the coming days, suggesting the deal has entered its final stages.
Citing people familiar with the matter, ADNOC Distribution – the publicly listed retail arm of the UAE’s state-owned oil giant is the entity leading the acquisition.
If completed, the deal would give the company control of approximately 600 fuel stations, representing around 10% of South Africa’s retail fuel market.
The acquisition would mark one of ADNOC’s most significant investments in sub-Saharan Africa, extending the company’s global acquisition drive as it seeks to expand its downstream and retail footprint beyond the Middle East.
A strategic bet on Africa’s largest fuel market
South Africa is the continent’s most industrialised economy and one of Africa’s largest fuel markets, helping explain continued investor interest in the country’s downstream energy sector.
Acquiring Shell’s extensive retail network would give ADNOC an established nationwide presence without having to build new infrastructure from the ground up.
The network has long been one of South Africa’s most recognised fuel retail brands, offering the Emirati company immediate access to customers across the country.
The proposed transaction also reflects the growing appetite of Gulf state-backed energy firms for strategic assets across Africa as they diversify beyond their home markets and strengthen their global operations.
Source: Africabusinessinsider