ADNOC L&S Bolsters Maritime Presence with $1 Billion Acquisition of Navig8

$1 Billion Acquisition of Navig8

3rd June 2024

Report : ADNOC L&S buys 80% of shipping firm Navig8 for $1 billion to expand its maritime reach.

ADNOC Logistics & Services (ADNOC L&S), the maritime arm of the Abu Dhabi National Oil Company (ADNOC), announced a significant move today with the acquisition of a majority stake in UK-based tanker owner and operator Navig8. The deal, valued at over $1 billion, marks a strategic expansion for ADNOC L&S as it seeks to solidify its position as a leading player in global energy maritime logistics.

Under the terms of the agreement, ADNOC L&S will acquire 80% of Navig8 for AED 3.8 billion (approximately $1.03 billion). The remaining 20% stake will be purchased in 2027 for an additional consideration ranging from $335 million to $450 million. This phased acquisition strategy allows ADNOC L&S to gain immediate control over a significant portion of Navig8’s operations while providing flexibility for future adjustments.

The acquisition is expected to be immediately accretive to ADNOC L&S, boosting its earnings per share by at least 20% in the first full year. This significant growth is attributed to Navig8’s strong financial performance, with the company recording earnings before interest, taxes, depreciation, and amortization (EBITDA) exceeding $400 million in 2023. Notably, this figure represents nearly half of ADNOC L&S’s core earnings for the same period, highlighting the substantial value addition brought by Navig8.

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“We are progressing towards achieving our strategic growth investment target with major expansions of our fleet and global footprint,” said Captain Abdulkareem Al Masabi, CEO of ADNOC L&S. “The acquisition of Navig8, combined with our recent shipbuilding activities, demonstrates that ADNOC L&S is delivering on our strategy to maximize shareholder value.”

ADNOC L&S currently operates a diversified fleet exceeding 240 owned and chartered vessels. The company also holds a 25-year exclusive agreement to service all petroleum ports in Abu Dhabi. The acquisition of Navig8 brings significant advantages to this existing infrastructure.

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Navig8 boasts a fleet of 32 modern tankers, significantly expanding ADNOC L&S’s operational capacity. Additionally, Navig8’s presence in 15 international cities strengthens ADNOC L&S’s global reach, offering a wider network for logistics and service delivery. This expanded footprint aligns with ADNOC L&S’s vision of becoming a preeminent player in the global energy maritime sector.

Analysts view the acquisition as a strategic win for ADNOC L&S. “This deal allows ADNOC L&S to not only enhance its fleet capacity but also gain access to valuable expertise in tanker pool management,” commented Omar Khalid, a maritime logistics expert based in Dubai. “Navig8’s established network will further streamline ADNOC L&S’s operations and position them for continued growth.”

The successful completion of this acquisition demonstrates ADNOC L&S’s commitment to its ambitious growth strategy. By integrating Navig8’s resources and expertise, ADNOC L&S is poised to significantly strengthen its position in the global energy maritime logistics landscape.

Conclusion

The acquisition of Navig8 by ADNOC L&S signifies a major development in the global energy maritime sector. This strategic move positions ADNOC L&S for significant growth, bolstering its fleet capacity, expanding its global reach, and enhancing its service offerings. The combined expertise and resources of both companies hold the potential to create a dominant force in the energy maritime logistics industry.

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