Abu Dhabi-based fuel and convenience retailer ADNOC Distribution has signed an agreement to acquire 15 fuel service stations in Saudi Arabia as part of plans to expand in the kingdom.
The purchase consideration for the acquisition is Dhs36.7m ($10m) and the deal is subject to certain conditions, including obtaining regulatory approvals, a statement said.
Located in the eastern region, with sites on both the highway and within communities, the new stations will be refurbished and offer fuel and retail services to customers, including convenience stores.
ADNOC Distribution opened its first service station in Saudi Arabia in December 2018, located on the Riyadh-Dammam highway around 40km from the capital. The second station was opened in the city of Hofuf within Al Ahsa governate.
Following the agreement, the company’s total network will reach 17 across the kingdom.
Ahmed Al Shamsi, acting CEO, ADNOC Distribution, said: “Expanding our presence in Saudi Arabia is an important milestone for our company and part of our profitable growth strategy. We see this expansion as a natural progression since opening our first station in 2018 and look forward to significantly increasing our presence in the coming years.
“This is the first announcement of many we intend to make with Saudi being a key strategic market for us.” Saudi is currently the largest fuel retail market in the GCC. ADNOC Distribution, the only fuel retailer operating in all seven emirates in the UAE, said it sees value creation potential coming from an uplift in fuel margins.
“Saudi Arabia is the largest market in the GCC and there is huge potential for experienced fuel operators like us to consolidate the market and capture further growth,” said Al Shamsi.
“And we are currently in discussions on a range of opportunities to further build on our network in the country. With such a vast and diverse landscape, we aim to bring our fuel and retail experience to benefit local communities and industrial areas across the kingdom.”