3th June 2024

Report : ADNOC L&S buys Navig8 for $1 billion, expands 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.

“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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