ADNOC to offer 10% stake of fuel distribution business in initial public offering

ADNOC Distribution, the UAE’s largest fuel distributor and convenience store operator, announced plans to offer a 10% stake in the company through an initial listing on the Abu Dhabi Securities Exchange (ADX).

UAE Minister of State and ADNOC Group CEO H.E. Sultan Ahmed Al Jaber said the decision to launch ADNOC Distribution’s initial public offering (IPO) is a historic moment for ADNOC and the first time it will be offering shares of one of its subsidiary companies to the public.

The initial public offering is the first of several expected in the region, most notably that of Saudi state-owned oil giant Saudi Aramco.

Adnoc may seek a value of USD10 billion to USD14 billion for the distribution unit, according to Bloomberg. The business posted earnings before interest, tax, depreciation and amortization of AED2.1 billion (USD571 million) last year, suggesting a price-to-earnings ratio of up to 25 times.

The planned IPO of ADNOC Distribution will be subject to finalising all the regulatory approvals, including approvals from the UAE Securities and Commodities Authority and the ADX.

“The planned IPO, to be listed on the Abu Dhabi Securities Exchange, will offer both UAE and international investors an unprecedented opportunity to invest alongside ADNOC in one of the region’s leading retail brand,” said Al Jaber.

“This marks a major milestone in our history and a significant step-change in our transformation. Importantly, it also signals a new chapter in the growth and development of the UAE’s capital markets. But to be clear, ADNOC at a holding company level, will always remain wholly owned by the Abu Dhabi Government.”

Al Jaber said the proposed IPO is in line with the vision of the UAE’s leadership, which has set ambitious socio-economic goals to ensure a sustainable and prosperous future for the nation. The planned IPO would underpin ADNOC’s integrated 2030 strategy that is focused on unlocking the full potential of its entire value chain to deliver a more profitable upstream; a more valuable downstream and an economic, sustainable gas supply.