Abu Dhabi National Oil Company for Distribution (ADNOCDIST) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of 100% of Shell Downstream South Africa (SDSA) for ~$1 billion accelerates international growth, diversifies earnings, and positions the buyer as a leading mobility player in South Africa.

• Entry into South Africa strengthens the international platform, following previous expansions into Saudi Arabia and Egypt.

• SDSA offers a high-quality, diversified platform with leading positions in retail, corporate, aviation, and lubricants, and a strong national footprint.

• South Africa's robust, regulated fuel retail framework provides predictable returns, earnings, and cash flow visibility.

• The deal leverages advanced retail capabilities and proven M&A track record in similar markets.

Financial terms and conditions

• Implied enterprise value of ~$1 billion for 100% of the share capital, with a cash payment of ~$400 million at closing and local ZAR-denominated debt at SDSA level.

• Buyer will ultimately own 72% after a 28% sell-down to a local empowerment partner and ESOP post-closing.

• Transaction is debt-financed: 50% at group level, 40% at target level (ZAR-denominated, non-recourse), and 10% from local partner.

• Expected to be accretive in year one: 6% EPS and 13% EBITDA accretion, with a free cash flow yield of ~15%.

• Deal executed at ~6x EV/EBITDA, maintaining pro forma net debt/EBITDA below 1.2x.

Synergies and expected cost savings

• Estimated incremental run-rate EBITDA of $30–$40 million by year five, ramping up from year two, driven by network optimization, supply arrangements, commercial growth, and non-fuel retail uplift.

• Synergies expected from leveraging expertise in non-fuel retail, digital enablement, and supply chain optimization.

• Additional value from leveraging ADNOC’s scale and coordination across the platform.