The United States-based fertilizer producer CF Industries Holdings and Dutch competitor OCI are merging some of their assets in an US$8 billion deal including debt.
Last month, CF and OCI said they were in talks over a potential merger, but on Thursday the two announced that their boards had “unanimously approved” the transaction.
CF shareholders will own just over 72 per cent of the combined entity, with OCI owning the rest.
The deal will include OCI’s nitrogen production facilities in Geleen, Netherlands, and Wever, Iowa, and its interest in an ammonia and methanol complex in Beaumont, Texas, in addition to OCI’s global distribution business in Dubai.
OCI’s operations in Egypt and Algeria are not part of the deal.
“Combining our businesses with CF builds upon the company’s platform in Europe and expansive distribution network in North America, enhancing our collective scale and improving our ability to meet the needs of customers in the US and around the world,” said Nassef Sawiris, the chief executive of OCI.
The combined entity will also purchase a 45 per cent interest, plus an option to acquire the remaining interest in OCI’s Natgasoline project in Texas, which upon completion in 2017 will be one of the world’s largest facilities for the production of methanol.
For CF, the deal will enhance its operations in its home market and expand them beyond the US. Currently it has facilities in the US, Canada and the UK.
OCI produces nitrogen fertilizers, methanol and other natural gas-based chemical products, which are used by agricultural and industrial customers. It has operations in the Netherlands, the US, Egypt and Algeria.
In March, OCI spun off its engineering and building business from its fertilizers and chemicals unit.
That led to the listing of Orascom Construction on Nasdaq Dubai and the Egyptian Stock Exchange.
selgazzar@thenational.ae
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