South African diversified investment holding company Reatile Group and ADNOC Distribution, part of Abu Dhabi’s State-owned energy group ADNOC, have announced that they have agreed to a long-term strategic relationship with a definitive agreement by which Reatile will acquire a minority shareholding in Shell Downstream South Africa (SDSA). This agreement will come into force once ADNOC Distribution has completed its acquisition of SDSA from Shell South Africa Holdings.

ADNOC’s 100% acquisition of SDSA, announced in July, is valued at some $1-billion, before adjustments for net debt and working capital. The deal is subject to regulatory approvals and the meeting of the conditions precedent and the closing conditions. All being well, the deal is expected to be concluded next year.

“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,” affirmed Reatile Group founder and chairperson Simphiwe Mehlomakulu. “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.”

ADNOC regards the South African market as having attractive fundamentals. These are supported by the country’s investments in its critical transport infrastructure, rising driving-age population and a transparent fuel retail regulatory environment, while the pricing structures insulate margins from currency volatility and inflation. The deal with Reatile shows ADNOC’s commitment to South Africa’s broad-based black economic empowerment policies.

“The partnership with Reatile Group as our local partner marks an important step in our commitment to South Africa,” highlights ADNOC Distribution CEO Engineer Bader Saeed Al Lamki. “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.”

South Africa is the second African country into which ADNOC Distribution has invested, following its 2023 acquisition of TotalEnergies Marketing Egypt. The company now operates in three markets beyond its homeland, the other being Saudi Arabia, which it entered in 2018.