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United Arab Emirates’ (UAE) Adnoc Distribution, which is proceeding with the proposed deal to buy Shell’s downstream business for $1bn, has picked investment holding group Reatile as its black economic empowerment partner.Adnoc, on Friday, said the partnership with Reatile affirms its commitment to comply with South Africa’s policies while contributing to the country’s long-term economic priorities, including local participation.“The partnership with Reatile Group as our local partner marks an important step in our commitment to South Africa,” Adnoc CEO Bader Saeed Al Lamki said.“Reatile Group has a deep understanding of the South African energy sector, its regulatory environment, and operating requirements. With a shared focus on sustainable value creation, we look forward to building the business’s strong foundations for the benefit of customers, employees and communities.”The parties did not disclose how much equity Reatile will have in the business, which houses about 600 forecourts across the country.Thebe Investment — owned by Black investors — has a 28% stake in Shell’s local retail operation. Thebe first invested in Shell in the early 2000s.For Reatile, founded and chaired by Simphiwe Mehlomakulu, the mooted transaction adds to its sprawling portfolio of energy assets, which stretch from gas to renewable energy projects.Mehlomakulu, who sits on the board of JSE-listed logistics group Super Group, said the investment in Shell is a giant leap for the group.“Our partnership with Adnoc Distribution represents a significant milestone for Reatile Group and reflects the confidence placed in our 23-year track record of investing in, operating, and growing energy businesses across South Africa,” he said.“By combining Adnoc Distribution’s global expertise and financial strength with Reatile’s deep local market knowledge and long-standing industry relationships, we are well positioned to support the continued growth of this strategic business, create sustainable value for stakeholders and contribute to South Africa’s energy security and economic development.”Mehlomakulu’s career began at Sasol Ltd in 1993, where he held various roles, including that of global export manager for Sasol Solvents.Our partnership with Adnoc Distribution represents a significant milestone for Reatile Group and reflects the confidence placed in our 23-year track record of investing in, operating, and growing energy businesses across South Africa— Simphiwe Mehlomakulu, Reatile chair He also had a stint at PetroSA, where he held the role of MD of its European operations in 2003.Adnoc, which expects the deal to buy Shell’s downstream business to be concluded next year, said the transaction’s business case remains strong.“The South African fuel retail sector offers attractive fundamentals, which are supported by the country’s investments in critical transport infrastructure, growing driving-age population and transparent regulatory framework for fuel retail, with pricing structures designed to insulate margins against inflation and currency volatility,” it said.“The proposed acquisition represents a key milestone in Adnoc Distribution’s international growth strategy towards building a stronger fuel retail presence in Africa. South Africa would become the fourth country in which Adnoc Distribution operates, following its acquisition of a 50% stake in TotalEnergies Marketing Egypt in 2023 and the launch of its retail fuel station operations in Saudi Arabia in 2018.”
