Multinational fuel and convenience retailer Abu Dhabi National Oil Co (Adnoc Distribution) intends to acquire 100% of the share capital of integrated energy and petrochemical company Shell Downstream South Africa for $1-billion.
This marks a significant step towards Adnoc Distribution’s drive to become a global mobility and convenience retailer, while advancing its fuel retail footprint in Africa.
Adnoc Distribution expects the acquisition to boost its earnings a share by 6% in the first full year after deal completion and generate an internal rate of return in excess of the company’s minimum rate of return to deliver immediate shareholder value.
The company hopes to build on its current record of international expansions in Egypt and Saudi Arabia, and aims to contribute positively to South Africa’s economy.
Following the completion of the proposed acquisition, a 28% stake in Shell Downstream South Africa is expected to be sold to a local empowerment partner alongside an employee stock option plan.
