Shell Nears End of Dispute, Paving Way for $1 Billion South African Assets Sale
Shell Plc and its South African partner, Thebe Investment Corp., are nearing a resolution to a valuation dispute, opening the door for the sale of Shell's local downstream assets for up to $1 billion.
Shell operates a network of 600 service stations in South Africa, while Thebe holds a 28% stake in the local retail operation acquired in 2002. The dispute emerged in 2022 when Thebe sought to exit its stake and the parties failed to agree on the asset's value.
Sources close to the matter, who requested anonymity, indicate that the parties are approaching an agreement to resolve the impasse. Shell declined to comment, while Thebe was unreachable for comment.
A potential deal could result in Thebe receiving more than the initial $200 million valuation it proposed in 2022. At the time, Shell estimated the stake's value to be lower.
The agreement to sell, facilitated by Rothschild and Co., will provide potential buyers with certainty in the transaction size as they submit binding offers in the coming weeks.
Saudi Aramco, Abu Dhabi National Oil Co., and Trafigura are among the parties that have expressed interest in the assets, according to Bloomberg's previous reporting.
Shell's sale of its downstream assets follows the divestment of Sapref, South Africa's largest oil refinery, which Shell and BP Plc sold for a nominal fee to the state-owned Central Energy Fund in 2022.
The deal for Shell's assets also follows the acquisition of Engen Ltd., South Africa's largest gas station chain, by Vitol Group in 2023. Engen was previously owned by Malaysia's Petroliam Nasional Bhd.