Adnoc Distribution ready to explore Egypt after Total purchase

Adnoc

• The Abu Dhabi fuel and convenience retailer has bought a 50% stake
• Deal adds 240 service stations and wholesale operations to portfolio
• Adnoc unit plans to open Oasis convenience stores in Egypt

Adnoc Distribution is expanding its fuel retail business to Egypt after buying a 50 percent share in local operator TotalEnergies.

The subsidiary of Abu Dhabi National Oil Company said on Wednesday that it had completed the purchase of the stake from TotalEnergies Marketing Afrique. 

The agreement includes a portfolio of 240 service stations, 100-plus convenience stores and more than 250 lubricant changing stations and car washes, as well as wholesale fuel, aviation fuel and lubricant operations.

• Abu Dhabi and World Bank unit to invest $1.5bn in emerging markets

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Adnoc Distribution also plans to bring its Oasis convenience store brand to the Egyptian market. 

The deal follows forecasts that mergers and acquisitions activity will remain buoyant in the Gulf in 2023.

A research report by Norton Rose Fulbright partner Zubair Mir and counsel Shazi Askarpour said M&A activity had been fuelled by sovereign wealth funds and government-related entities in 2022 – “with neither showing any signs of slowing down” this year. 

The Total acquisition also follows a busy 2022 for Adnoc Distribution, during which it opened 68 service stations in the UAE and Saudi Arabia, and reported net profit of AED2.75 billion ($748.8 million).

Its total fuel volumes increased by 8 percent year-on-year in 2022, with commercial fuel volumes up by 19 percent.

Non-fuel retail transactions increased by 15 percent last year.

Bader Saeed Al Lamki, CEO of Adnoc Distribution, said: “We are excited with our move into a fast-growing market like Egypt, which has significant potential in fuel retail and mobility solutions. 

“Closing this transaction marks a significant milestone in Adnoc Distribution’s international growth journey, demonstrating our ability to expand in attractive international markets … Egypt is the Arab world’s most populous country with great economic potential and we look forward to bringing our offering to this dynamic market.”

Adnoc Distribution opened its first service station outside the UAE in 2018 by expanding into Saudi Arabia. It now has 66 sites in the kingdom. Adnoc Voyager, which produces engine oils, is sold in 25 countries.

At home in the UAE, the company operates 502 retail fuel stations and 362 convenience stores.

After reporting its 2022 results, Adnoc Distribution said it was exploring potential growth opportunities linked to the energy transition, such as electric vehicle charging. The company has also committed to reducing the carbon intensity of its operations by 25 percent by 2030.