Abu Dhabi National Oil Co. for Distribution (ADX:ADNOCDIST), d/b/a Adnoc Distribution, unveiled that it will team up with Reatile Group on the South African downstream business that the former is purchasing from energy giant Shell (SHEL.L, SHELL.AS).
The fuel distributor said Thursday it agreed to divest a minority interest in Shell Downstream South Africa to the Africa-focused diversified investment holding company, upon completion of its acquisition of the business from Shell South Africa Holdings.
Adnoc Distribution disclosed the purchase deal for the business in July. The transaction has an implied value of $1 billion and covers Shell's 580 company- and dealer-owned fuel stations in South Africa, together with wholesale fuel, aviation and lubricants operations. Without identifying its counterparty, Adnoc Distribution said back then that it would divest a 28% stake in the business to a local empowerment partner and employee stock option plan following the purchase.
The Abu Dhabi-listed company said collaborating with Reatile is in line with its commitment to Broad-Based Black Economic Empowerment policies in South Africa, as well as to contributing to the long-term economic objectives of the country.
Completion of the transfer of the Shell business is subject to regulatory approvals, among other customary closing conditions. The retail service stations and lubricants business covered in the transaction will retain the Shell brand under a long-term licensing deal with Adnoc Distribution.
Adnoc Distribution shares were unchanged during midday trading Friday, while Shell's shares also barely moved in both London and Amsterdam.
