South African investment company Reatile Group is set to take a minority stake in Shell’s downstream business in South Africa following Abu Dhabi-based ADNOC Distribution’s proposed $1 billion acquisition of the company.
Reatile, founded by businessman Simphiwe Mehlomakulu, has been selected as ADNOC Distribution’s local partner in the transaction.
The deal, which is expected to be completed in 2027, is subject to regulatory approval and other conditions.
Shell Downstream South Africa operates about 580 service stations and 360 convenience stores across the country. Its operations also include commercial and wholesale fuel supply, aviation and marine fuels, as well as lubricants.
The business sells approximately 3.5 billion litres of fuel annually.
ADNOC Distribution agreed in July to acquire 100 per cent of Shell’s South African downstream operations for an enterprise value of about $1 billion, subject to adjustments for debt and working capital.
The exact percentage that Reatile will own and the amount it will invest have not been disclosed.
ADNOC had earlier announced plans for a combined 28 per cent interest to be allocated to a local empowerment partner and an employee ownership scheme. However, the company has not stated how that stake will be divided between Reatile and employees.
The partnership is expected to help the business meet South Africa’s Broad-Based Black Economic Empowerment requirements, which promote increased black ownership and participation in the economy.
Mehlomakulu founded Reatile in 2003 after working as a chemical engineer at Sasol and PetroSA. The company has since invested in energy, petrochemicals and related sectors.
Following the acquisition, the Shell brand will continue to operate across the fuel stations and lubricants business under a long-term licensing agreement.
ADNOC Distribution expects the acquisition to increase its earnings per share by about 6 per cent in the first full year after completion.
The transaction will further expand ADNOC Distribution’s international operations, adding South Africa to its existing markets in the United Arab Emirates, Saudi Arabia and Egypt.
However, the final ownership structure and Reatile’s financial commitment will only be known after the transaction is completed.
