Adnoc Distribution, the UAE’s largest fuel and convenience retailer, is considering the potential acquisition of fuel distribution assets worth $10 million in Saudi Arabia, the company said on Monday.
The company's board will review the possible deal on Wednesday, it said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.
Adnoc Distribution has held long-standing ambitions to expand in Saudi Arabia, the Arab world’s largest economy.
The company listed expansion into the kingdom as one of its goals in its prospectus when it listed on the ADX three years ago and opened its first service station in the kingdom in 2018.
Adnoc Distribution currently operates more than 420 service stations in the UAE, according to its website.
The company said last month that it was in "advanced discussions to finalise land leases with landlords, as well as to grow our network inorganically" in Saudi Arabia.
“We see the Saudi Arabian fuel market as large and fragmented, with underdeveloped customer offerings," the company said.
"Adnoc Distribution’s experience and strengths can be leveraged to introduce world-class fuel station and customer service standards in Saudi Arabia to capture growth.”
The company reported a 22 per cent jump in its third-quarter profit to Dh671m ($183m) as direct costs fell by 47 per cent to Dh2.3 billion.
The company also expressed interest in expanding into Egypt, the Arab world's most populous nation.
In September, Adnoc successfully completed the placement of 1.25 billion of its shares in Adnoc Distribution with institutional investors.
This represented 10 per cent of Adnoc Distribution’s total share capital, and increased the company’s free float on the ADX to 20 per cent.
The company is the sole fuel distributor in Abu Dhabi and has a dominant market position in Sharjah, Ras Al Khaimah, Fujairah, Ajman and Umm Al Quwain.
It is rapidly expanding in Dubai, where it opened its 20th station last month, with between six and 11 more expected by the end of the year.
The expansion has already allowed the company to more than triple its footprint in the emirate, from just six stations at the start of the year.
