By Des Erasmus
Abu Dhabi’s ADNOC Distribution has agreed to buy Shell’s South African downstream business in a deal valued at about $1 billion, giving the Gulf state-backed fuel retailer one of the biggest forecourt networks in the country and a major foothold in Africa’s most industrialised economy.
The company said on Tuesday via a statement that it had entered into a “definitive agreement” to acquire 100% of Shell Downstream South Africa from Shell South Africa Holdings, including 580 company- and dealer-owned fuel stations, wholesale fuel, aviation, marine and lubricants operations.
The transaction, which is still subject to regulatory approvals and other closing conditions, is expected to close in 2027.
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ADNOC said the implied enterprise value was about $1 billion before adjustments for net debt and working capital.
The acquisition would give ADNOC immediate scale in the country’s tightly regulated fuel retail market, where fuel prices are set by government and forecourt operators compete heavily on location, convenience retail and brand loyalty.
ADNOC said Shell Downstream South Africa sold about 3.5 billion litres of fuel in 2025 and operated 360 convenience stores, making the deal a significant consumer-facing transaction in South Africa’s energy and retail sectors.
The Shell brand will remain on South African service stations and lubricants businesses after the transaction closes under a long-term brand licensing agreement, ADNOC said.
ADNOC chief executive Bader Saeed Al Lamki said the deal marked a “significant milestone” in the company’s international growth strategy and reflected confidence in South Africa as a “high-potential, well-regulated fuel retail sector”.
Local empowerment
The deal also brings a local empowerment component. ADNOC said a 28% stake in Shell Downstream South Africa is expected to be sold to a local empowerment partner and an employee stock option plan after completion.
The company said it would seek a partner with experience in South Africa’s fuel sector, regulatory framework and local operating requirements, including alignment with broad-based black economic empowerment legislation.
The acquisition follows Shell’s announcement in May 2024 that it planned to sell its shareholding in Shell Downstream South Africa as part of its strategy to simplify its portfolio and focus on performance and capital discipline.
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For ADNOC Distribution, the South African deal would mark its fourth operating market, after the United Arab Emirates, Saudi Arabia and Egypt. The company said the transaction was expected to lift earnings per share by 6% in the first full year after completion.
ADNOC said South Africa’s fuel market offered attractive fundamentals, such as investment in transport infrastructure, a growing driving-age population and regulated pricing structures that help protect margins from inflation and currency swings.
The deal comes as South Africa’s fuel retail industry faces muted economic growth, volatile consumer demand and pressure on household spending. Even so, the industry remains supported by the country’s heavy reliance on road transport and liquid fuels to move people and goods.
