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Sunday, 31 July 2022

Adnoc is buying 50% of filling station chain TotalEnergies Egypt

Adnoc is entering Egypt’s fuel retail space: The distribution arm of Abu Dhabi National Oil Company (Adnoc) has agreed to acquire 50% of TotalEnergies Egypt, according to a press release (pdf) Thursday. Adnoc Distribution could pay up to USD 203 mn for the shares, which the company said would be the largest acquisition in its history.

The details: Adnoc Distribution has agreed to purchase the shares from Total Energies Marketing Afrique for USD 186 mn, but could pay an additional USD 17.3 mn if certain conditions are met, the statement said, without getting into specifics. The transaction is set to be completed in 1Q 2023 and needs regulatory approvals.

What it’s buying: TotalEnergies Egypt is one of the biggest fuel retail operators in Egypt and has a portfolio of 240 filling stations, more than 100 convenience stores, over 250 lube changing stations, and car washes, and wholesale fuel, aviation fuel, and lubricant operations. Under the agreement, some service stations will be rebranded as Adnoc, and some future sites will be Adnoc-badged, the statement said.

What they said: “Adnoc Distribution and TotalEnergies 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,” the statement said.

Adnoc first pushed out of the UAE four years ago: The ADX-listed giant opened in 2017 its first stations outside the UAE in Saudi Arabia; it now has 55 locations in KSA, according to its 1Q 2022 earnings release. The company operates 464 retail fuel stations and 350 convenience stores in its home market.

IN CONTEXT- The Emiratis have been on a spending spree in Egypt led by Abu Dhabi sovereign wealth fund ADQ. Starting last year with upmarket realtor SODIC, which ADQ took over alongside Al Dar Properties, the wealth fund has this year invested USD 1.8 bn to acquire stakes in several EGX-listed companies owned by the government (including CIB) and is on course to acquire 60% of Auf Group via its food subsidiary Agthia. It is also preparing to invest USD 10 bn in industrial projects in Egypt, the UAE and Jordan under a three-way industrial partnership inked in May.

IN OTHER M&A NEWS-

Banque Misr’s acquisition of CI Capital’s consumer finance arm, Souhoola, went through last week in a transaction valued at EGP 173 mn, a source confirmed to Enterprise. The acquisition is part of restructuring plans that followed the state-owned bank’s acquisition of CI Capital in March 2021, they said. The acquisition last year saw Banque Misr purchase 65% of CI Capital, increasing its total stake in the financial services firm to 90%.

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