South African tycoon joins Abu Dhabi’s $1bn bid for Shell’s fuel business

Simphiwe Mehlomakulu

Johannesburg – South African businessman Simphiwe Mehlomakulu is set to take a minority stake in Shell’s extensive fuel retail business after Abu Dhabi’s ADNOC Distribution selected his Reatile Group as its local empowerment partner in the proposed $1 billion takeover, reports say.

The deal will give Reatile an interest in Shell Downstream South Africa, which operates about 580 company-owned and dealer-owned service stations, 360 convenience stores and several commercial fuel operations.

According to Business Insider Africa, Reatile will acquire an undisclosed minority interest once ADNOC completes its acquisition of Shell’s South African downstream business.

The transaction is expected to be completed in 2027, subject to regulatory approvals and other conditions.

Neither Reatile’s precise stake nor the amount it will invest has been disclosed.

Billionaires.Africa reported that ADNOC agreed in July to acquire Shell’s South African downstream business at an implied enterprise value of about $1 billion, or roughly R16 billion.

The publication said ADNOC will retain 72% of the business, while a combined 28% interest will be allocated to a local empowerment partner and an employee share ownership plan.

However, it remains unclear how that 28% will be divided between Reatile and the employee scheme.

ADNOC Distribution chief executive Bader Saeed Al Lamki welcomed the partnership with Reatile.

“The partnership with Reatile Group as our local partner marks an important step in our commitment to South Africa,” Al Lamki said, according to Billionaires.Africa.

“Reatile Group has a deep understanding of the South African energy sector, its regulatory environment and operating requirements,” he added.

The acquisition will give ADNOC control of one of South Africa’s biggest fuel retail networks, including approximately 3.5 billion litres in annual fuel volumes as well as aviation, marine-fuel, wholesale and lubricants operations.

The Shell brand is expected to remain on the forecourts under a long-term licensing agreement despite the change in ownership.

A businessman’s rise

Mehlomakulu founded Reatile in 2003 after leaving a career in the energy sector, including positions at Sasol and PetroSA.

Billionaires.Africa reported that he started Reatile with a R5 million commercial bank loan and his own capital at risk.

The company initially focused on liquefied petroleum gas before expanding into a broader energy investment group.

Over the years, Reatile has completed more than 34 acquisitions, disposals and mergers and expanded into pipeline gas, fuel storage, bitumen, renewable energy, battery storage and liquefied natural gas infrastructure.

The company has also invested in major energy infrastructure projects, including a stake in the Mozambique gas pipeline and the Notsi Solar Project in the Free State.

Billionaires.Africa reported that Reatile is working towards a 6GW renewable energy pipeline, while RMB provided the group with a R4.45 billion financing facility earlier this year.

The Shell transaction therefore marks another significant expansion for Mehlomakulu’s energy business.

ADNOC’s South African expansion

Business Insider Africa said the acquisition is part of ADNOC Distribution’s broader international expansion and will give the Abu Dhabi-based company a significant foothold in South Africa’s fuel market.

The business being acquired includes 580 service stations, 360 convenience stores and annual fuel sales of about 3.5 billion litres.

ADNOC expects the acquisition to increase its earnings per share by approximately 6% in the first full year following completion.

The company already operates in the United Arab Emirates, Saudi Arabia and Egypt, making South Africa its fourth market.

The deal also represents a major shift in ownership of South Africa’s fuel retail sector, with international oil majors increasingly making way for Gulf-backed energy companies and commodity traders.

Billionaires.Africa noted that Vitol-backed Vivo Energy became the market leader after acquiring a majority stake in Engen from Petronas in 2024, while Glencore has controlled the former Chevron network, now operating as Astron Energy.

ADNOC will become another major international player when the Shell transaction is completed.

For South Africa, the deal also brings a local ownership component through Reatile, helping meet the country’s broad-based black economic empowerment requirements.

The transaction remains subject to regulatory approval, with completion expected in 2027.

Until then, Shell’s South African downstream business will continue operating under its existing brand, while ADNOC and Reatile prepare to take control of the business.

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