ADNOC Distribution has signed a definitive agreement to acquire Shell Downstream South Africa for an implied enterprise value of about $1 billion, gaining the country’s third-largest fuel retail network and a platform for further African expansion. The target operates roughly 580 company-owned and dealer-operated service stations, 360 convenience stores, and an aviation fuel business supplying three airports and more than 15 airlines. Announced on Tuesday, the transaction gives the Abu Dhabi-listed company immediate scale in sub-Saharan Africa’s most industrialised economy and follows its 2023 entry into Egypt.

The acquisition is structured as a 100 percent purchase of the share capital from Shell South Africa Holdings, with ADNOC Distribution planning to sell a 28 percent stake to a local empowerment partner and an employee stock option plan after completion, retaining a 72 percent majority. A long-term brand licensing agreement will keep the Shell name on forecourts and lubricants. The company projects the deal will lift earnings per share by 6 percent in the first full year and generate an internal rate of return above its hurdle rate for fuel retail and convenience. BofA Securities acted as sole financial adviser.

South Africa’s fuel retail sector is underpinned by a regulatory framework that Gulf-based executives describe as robust and transparent, with pricing structures designed to shield operator margins from inflation and exchange-rate swings. A steadily expanding driving-age population supports long-term demand. For ADNOC Distribution, the transaction extends a deliberate internationalisation strategy that began with Saudi Arabia in 2018 and Egypt in 2023, and now positions the company across both the north and south of the African continent.

Completion is subject to regulatory approvals and is expected in 2027. The company has committed to selecting a local partner with deep knowledge of the South African market and its broad-based black economic empowerment legislation. The integration will be closely watched by investors for its ability to deliver the projected accretion while managing a large dealer-operated network and a legacy brand.