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ADNOC Distribution to Acquire 50% Stake in 'TotalEnergies Egypt'

The signing ceremony between ADNOC Distribution and TotalEnergies Egypt (Asharq Al-Awsat)
The signing ceremony between ADNOC Distribution and TotalEnergies Egypt (Asharq Al-Awsat)
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ADNOC Distribution to Acquire 50% Stake in 'TotalEnergies Egypt'

The signing ceremony between ADNOC Distribution and TotalEnergies Egypt (Asharq Al-Awsat)
The signing ceremony between ADNOC Distribution and TotalEnergies Egypt (Asharq Al-Awsat)

Abu Dhabi National Oil Company (ADNOC) Distribution agreed with "TotalEnergies Marketing Afrique SAS" to acquire a 50 percent stake in TotalEnergies Egypt for about $186 million, with an additional earn-out of up to $17.3 million.

TotalEnergies Egypt was established in 1998 and is a leading global multi-energy company with a strong brand and successful track record.

The partnership with TotalEnergies includes a diversified portfolio comprising 240 retail fuel stations, over 100 convenience stores, more than 250 lube changing stations, car washes, wholesale fuel, aviation fuel, and lubricant operations.

Through this deal, ADNOC Distribution and TotalEnergies will develop future growth opportunities for 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 acquisition will also see the refurbishment of several service stations to complete ADNOC branding, with specific future sites being constructed under the ADNOC brand, offering a robust foothold in Egypt's fast-growing fuel retail market.

The deal is expected to be completed in Q1 2023, pending satisfaction with certain conditions, including customary regulatory approvals.

Minister of Industry and Advanced Technology and Managing Director Sultan bin Ahmed al-Jaber described the acquisition as a "significant milestone in ADNOC Distribution's international growth story."

Jaber noted, "Egypt is the Arab world's most populous country, and we look forward to entering such a dynamic market."

The acquisition is also well aligned with the Industrial Partnership for Sustainable Economic Growth between the UAE, Bahrain, Egypt, and Jordan and will leverage the strengths of both the UAE and Egypt to boost growth in the related markets, he noted.

CEO of ADNOC Distribution, Bader al-Lamki, noted, "Egypt's fuel retail market is desirable with exciting potential for future growth. Due to its young and expanding population, alongside a series of progressive economic reforms, Egypt has recorded positive GDP growth with a strong outlook.

The acquisition is another milestone in delivering ADNOC Distribution's international growth strategy after it opened its first stations outside the UAE in Saudi Arabia in 2018, with 55 stations operational across the Kingdom at the end of March 2022.

The company's ADNOC Voyager lubricants continue to expand the company's overall international footprint, exporting to 20 countries globally.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.