Adnoc Distribution, the UAE’s largest fuel and convenience retailer, has completed the acquisition of a 50 per cent stake in TotalEnergies Egypt, marking the Abu Dhabi company's entry into Egypt.
The deal is expected to boost the company’s earnings before interest, taxes, depreciation and amortisation by more than 6 per cent starting from the first year after completion, Adnoc Distribution said in a filing on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.
“We are excited with our move into a fast-growing market like Egypt, which has a significant potential in fuel retail and mobility solutions,” said chief executive Bader Al Lamki.
“Closing this transaction marks a significant milestone in Adnoc Distribution’s international growth journey, demonstrating our ability to expand in attractive international markets.”
Adnoc Distribution said last year that it would take a stake in the Egyptian fuel retailer for about $186 million and make an additional earn-out of up to $17.3 million if certain conditions were met.
TotalEnergies Egypt, which operates 240 fuel retail stations and more than 100 convenience stores, also has wholesale fuel, aviation fuel and lubricant operations.
Adnoc Distribution plans to launch its signature Oasis convenience stores in Egypt, it said, without providing a timeline.
“Egypt is the Arab world’s most populous country, with great economic potential, and we look forward to bringing our offering to this dynamic market,” said Mr Al Lamki.
The company opened 21 new stations in the UAE in the fourth quarter, taking its local network to more than 500 sites.
“TotalEnergies is pleased to be joining forces with Adnoc Distribution in Egypt. The rich experience of the leading fuel distributor in the UAE will bring substantial added value,” said Thierry Pflimlin, president of marketing and services at TotalEnergies.
Adnoc Distribution's net profit for last year surged 22 per cent as revenue rose on the back of strong growth in fuel sales.
The company's 2022 revenue jumped about 54 per cent to more than Dh32 billion, driven by higher fuel selling prices amid a rise in global crude prices.
Adnoc Distribution has also been entering new sectors.
Last month, the company and Abu Dhabi National Energy Company, better known as Taqa, said they would form a joint venture that will build and operate electric vehicle infrastructure in Abu Dhabi.
The venture, E2GO, aims to become the principal provider of EV charging points and associated infrastructure across the UAE capital.
Last month the company said it planned to reduce its carbon intensity by 25 per cent by 2030.
The move is aimed at decarbonising its operations by reducing its Scope 1 carbon emissions, which come directly from its operations, and Scope 2 carbon emissions, from the energy it uses in its operations.
Adnoc Distribution said it would install solar panels to power service stations, use biofuels in its fleet of vehicles and expand its network of EV charging stations, in addition to using eco-friendly “green concrete” in the construction of service stations.
Recently, the company converted an existing $1.5 billion term loan into sustainability-linked funding, in partnership with First Abu Dhabi Bank as environmental, social and governance co-ordinator.
