Adnoc L&S to acquire 80% of shipping pool operator Navig8 for $1bn

The remaining stake will be bought in 2027

An Adnoc L&S barge. The company expects to save more than $100 million each year by reducing technical management and fuel costs. Photo: Adnoc L&S

Adnoc Logistics and Services will acquire global shipping pool operator Navig8 TopCo Holdings to bolster its fleet and expand into new markets.

Adnoc’s maritime logistics unit will purchase 80 per cent of Navig8 for $1.04 billion, with ownership taking effect on January 1, 2024, the company said on Monday.

The remaining 20 per cent of Navig8 will be acquired by Adnoc L&S in 2027 for an additional consideration in the range of $335 million to $450 million.

The acquisition is part of the company’s $5 billion investment programme.

“This value-accretive acquisition marks another major milestone as we deliver on our transformational growth strategy,” said Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S.

“The addition of Navig8’s presence in 15 international cities, [its] fleet of tankers and world-class services will expand our geographical footprint and service offering.”

The acquisition of Navig8, which has a fleet of 32 modern tankers, will be immediately value accretive, Adnoc L&S said, adding that the first full year of investment is projected to boost earnings per share by at least 20 per cent.

Navig8 recorded more than $400 million in earnings before interest, taxes, depreciation and amortisation, in 2023, equivalent to 44 per cent of Adnoc L&S’s core earnings in the same period.

Through the transaction, Adnoc L&S said it expects to save more than $100 million each year by reducing technical management and fuel costs.

Navig8 will continue to operate as an independent entity within the Adnoc subsidiary following the closing of the acquisition.

“The opportunity to work collaboratively with Adnoc L&S and the wider Adnoc Group brings together their extensive knowledge of energy markets with Navig8’s unique presence in the maritime sector,” said Nicolas Busch, chief executive of Navig8.

“This will allow us to enhance the service and value we deliver to both our customers and the Navig8 group.”

The deal marks Adnoc L&S’ second major acquisition in about two years.

In 2022, the company announced the acquisition of ZMI, an Abu Dhabi company that owns and operates offshore support vessels.

Before the acquisition, ZMI, which is currently an independent entity under Adnoc L&S, was the world’s largest owner and operator of self-propelled jack-up barges, with operations in the UAE, Saudi Arabia, Qatar and China.

Adnoc L&S currently delivers energy products to more than 100 customers in about 50 countries through its three business units – integrated logistics, shipping and marine services.

The company made its debut on the Abu Dhabi bourse in June last year after parent company Adnoc raised about Dh2.83 billion ($770 million) from the sale of a 19 per cent stake in the subsidiary.

Last month, Adnoc L&S reported a 34 per cent increase in its first-quarter profit and raised its revenue forecast for the full year.