ADNOC Distribution is set to expand its operations in South Africa after agreeing to acquire a minority stake in Shell Downstream South Africa (SDSA), giving it control of Shell’s network of about 600 filling stations across the country.

The transaction has an estimated enterprise value of about $1 billion and is expected to be completed by the end of 2027, subject to regulatory approvals and other closing conditions.

The deal follows Shell’s decision to sell some of its non-core assets as it focuses on businesses considered central to its long-term oil and gas strategy. Shell had previously held talks with Gunvor Group over the South African business, but the negotiations did not result in a deal.

ADNOC Distribution, which is the largest fuel supplier in the United Arab Emirates, emerged as the preferred bidder for the South African operations.

To comply with South Africa’s Black Economic Empowerment requirements, ADNOC Distribution has partnered with Reatile Group, a local energy investment company.

ADNOC said the partnership would support local participation, job creation, energy security and sustainable economic development in the country.

ADNOC Distribution CEO Bader Saeed Al Lamki said the partnership marked an important step in the company’s commitment to South Africa, while Reatile Group chairman Simphiwe Mehlomakulu said the agreement would combine ADNOC’s financial strength and international expertise with Reatile’s knowledge of the local energy market.

If completed, the transaction will make South Africa the fourth country where ADNOC Distribution operates, alongside the UAE, Egypt and Saudi Arabia.

The acquisition is expected to strengthen ADNOC’s position in South Africa’s fuel retail market while providing a new platform for its expansion across the country.