ADNOC Distribution has entered into an agreement with TotalEnergies Marketing Afrique SAS to acquire a 50% stake in TotalEnergies Marketing Egypt LLC (TotalEnergies Egypt) for approximately $186mn, with an additional earn-out of up to $17.3mn, if certain conditions are satisfied, the UAE’s state-owned oil and gas distributor said in a statement.
The partnership between TotalEnergies Egypt and ADNOC Distribution follows the strategic agreement signed by both companies on the occasion of the state visit of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates, in Paris.
ADNOC Distribution’s acquisition is expected to be completed in Q1 2023
Established in 1998, TotalEnergies Egypt operates about 7% of service stations in Egypt. The contemplated partnership includes a portfolio comprising 240 fuel retail stations, as well as wholesale fuel activities, an aviation fuel business, and lubricants sales.
Through this deal, ADNOC Distribution and TotalEnergies will develop future growth opportunities for TotalEnergies Egypt by unlocking value potential and exploring beneficial synergies in fuel distribution, lubricants and aviation businesses driven by economic growth and post COVID recovery, ADNOC Distribution added. The acquisition will also see the refurbishment of several service stations to full ADNOC branding, with certain future sites being constructed under the ADNOC brand, offering a robust foothold in a fast-growing fuel retail market in Egypt.
HE Dr Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, managing director and Group CEO of ADNOC, and chairman of ADNOC Distribution, said: “This acquisition marks a significant milestone in ADNOC Distribution’s international growth story. Egypt is the Arab world’s most populous country, and we look forward to entering such a dynamic market. The acquisition is also well aligned with the Industrial Partnership for Sustainable Economic Growth between the UAE, Bahrain, Egypt, and Jordan and will leverage the strengths of both the UAE and Egypt to boost growth in the related markets.
Bader Saeed Al Lamki, CEO of ADNOC Distribution, said: “Egypt’s fuel retail market is highly attractive with exciting potential for future growth. Due to its young and expanding population, alongside a series of progressive economic reforms, Egypt has recorded positive GDP growth with a strong outlook.
“This acquisition reaffirms our commitment to expanding our business in attractive international growth markets. It is a testament to our ability to leverage our experience in both fuel and non-fuel retail, to deploy cash to accelerate our international expansion, and to realise natural business synergies and partnership opportunities that allow us to quickly and efficiently enter new and dynamic markets.”
The acquisition is expected to be completed in Q1 2023, pending satisfaction of certain conditions, including customary regulatory approvals.
According to a statement from the French multinational company, Thierry Pflimlin, president of Marketing & Services at TotalEnergies, said: ‘’TotalEnergies is pleased to join forces with ADNOC Distribution in Egypt. The rich experience of an experienced fuel distributor in the GCC region will bring a significant added value to TotalEnergies Marketing Egypt. We look forward to collaborating with ADNOC Distribution in a combined growth strategy.’’
The acquisition is another milestone in the delivery of its international growth strategy, after it opened its first station outside the UAE in Saudi Arabia in 2018, with 55 stations operational across the kingdom as of March 2022, ADNOC Distribution noted.
