PwC advised ADNOC on its market entry deal in Egypt

02 March 2023 2 min. read

Abu Dhabi National Oil Company (ADNOC) has completed its acquisition of a 50% stake in TotalEnergies in Egypt, in a move that sees the Emirati oil giant enter the Egyptian market. PwC provided buy-side deal advisory.

The deal reinforces the close alliance between France-headquartered TotalEnergies and ADNOC, which have had a strategic partnership for nearly 40 years across markets.

Through the deal valued at a consideration of around $200 million, the two companies are now expanding their collaboration into Egypt.

PwC advised ADNOC on its market entry deal in Egypt

With revenues of over $185 billion, TotalEnergies is one of the world's largest energy companies. Based in Egypt since 1998, TotalEnergies operates around 240 fuel retail stations in the nation, which represents about 7% of all gas service stations. TotalEnergies also has a portfolio of wholesale fuel activities, an aviation fuel business, and lubricants sales.

Buyer ADNOC Distribution – the fuel distributor business of ADNOC – is the largest fuel and convenience retailer in the United Arab Emirates, with over 460 stations and 350 convenience stores.

According to a release by ADNOC, the strategic investment is part of ADNOC’s strategy of international expansion and goal to “expand its area of influence across the Middle East and North Africa region.” Additionally, ADNOC Distribution sees Egypt as a promising growth market for its Oasis convenience store brand.

Launched in Abu Dhabi, ADNOC Distribution has since expanded into all seven emirates in the UAE, and in 2018 expanded into Saudi Arabia where it currently operates 55 retail fuel stations.

The acquisition is projected to boost ADNOC Distribution’s earnings before interest, taxes, depreciation and amortization by over 6% beginning in the first year after the transaction is completed.

Buyer ADNOC Distribution was advised by a cohort of M&A consultancies, with PwC serving as the lead financial advisor. “We’re proud to have advised ADNOC Distribution on the completion of its largest transaction entailing the acquisition of a 50% stake in TotalEnergies in Egypt”, said Leo Vera, partner at PwC.

Meanwhile, TotalEnergies said that by joining forces, the two companies’ strong presence and extensive industry expertise in the region will allow them to jointly boost their market leadership and better serve customers in Egypt. “We look forward to collaborating with ADNOC Distribution in a combined growth strategy,” said Thierry Pflimlin, President Marketing & Services at TotalEnergies.

The deal comes at a time of major growth in Egypys’ oil & gas industry. In 2022 alone, the country made 53 field discoveries, 42 oil and 11 gas wells, according to a report by the country’s petroleum ministry. World Oil estimates that drilling in Egypt is expected to climb by 7% this year.