UAE’s ADNOC Distribution said Thursday that it has agreed to acquire a 50% stake in TotalEnergies Marketing Egypt for approximately $186 million (EGP 3.5 billion) as part of the fuel and retail distributor’s global expansion plans.
The acquisition, which has an additional payment of as much as $17.3 million, is expected to be completed in the first quarter of 2023, pending the satisfaction of certain conditions and regulatory approvals.
The deal will “develop future growth opportunities of TotalEnergies Egypt through unlocking value potential and exploring beneficial synergies in fuel distribution, lubricants and aviation businesses driven by economic growth and post COVID recovery”, ADNOC Distribution said in a statement.
Under the deal, several service stations will be refurbished to full ADNOC branding, with certain future sites being constructed under the ADNOC brand.
“This acquisition by ADNOC Distribution reaffirms our commitment to expanding our business in attractive international growth markets,” Bader Saeed Al Lamki, CEO of ADNOC Distribution said in the statement. “Egypt’s fuel retail market is highly attractive with exciting potential for future growth.”
Founded in 1998, TotalEnergies’ Egyptian business has 240 fuel retail stations as well as wholesale fuel aviation fuel and lubricants operations.
Growth strategy
The deal marks another important milestone in ADNOC Distribution’s broader strategy to expand its business in attractive international growth markets. It increases the UAE energy firm’s access to a country it has previously identified as having a “great market.”
ADNOC Distribution, which has 464 retail fuel stations and 350 convenience stores in the UAE as of March 31, 2022, has been expanding its portfolio. The company opened its first fuel stations outside the UAE in Saudi Arabia in 2018 and has 55 operational stations across the kingdom as of the end of March.
With a market capitalization of $14.6 billion (AED 53.5 billion) as of August 29, 2022, ADNOC Distribution reported a 6.3% increase in net profits to $183 million (AED 671 million) in the first quarter of 2022 compared to the corresponding period last year.
