CF, OCI merger will createworld’s largest nitrogen company

CF, OCI merger will create the world’s largest nitrogen company

6:29 AM, 7th August 2015
CF, OCI merger will create the world’s largest nitrogen company
Tony Will, president and chief executive officer, CF Industries Holdings Inc. (File photo)

DEERFIELD, US: CF Industries Holdings Inc and OCI NV said that CF will combine with OCI’s European, North American and global distribution businesses in a transaction valued at approximately $8 billion, based on CF’s current share price, including the assumption of approximately $2 billion in net debt.

The transaction, which will create the world’s largest publicly traded nitrogen company, is expected to close in 2016.

CF expects to achieve approximately $500 million in after-tax annual run-rate synergies from optimization of operations, capital and corporate structure.

The transaction includes OCI’s nitrogen production facilities in Geleen, Netherlands, and Wever, Iowa, and the company’s interest in an ammonia and methanol complex in Beaumont, Texas, along with its global distribution business based in Dubai, UAE. The combined entity will also purchase a 45 percent 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 methanol facilities. On a combined basis the company will have production capacity of approximately 12 million nitrogen-equivalent nutrient tonne by mid-year 2016.

“This is a terrific opportunity for the shareholders of both companies, with mid- to high-teens cash flow accretion. This is also a great outcome for US farmers as we have another supply point that will ensure our critical products are delivered reliably and in-time,” said Tony Will, president and chief executive officer, CF Industries Holdings Inc.

“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 U.S. and around the world,” said Nassef Sawiris, CEO, OCI NV.

CF will become a subsidiary of a new holding company domiciled in the UK, where CF is the largest fertilizer producer following its recent acquisition of GrowHow. The new corporation will operate under the name CF and be led by existing CF management. 

The initial board of the new corporation will have 10 directors, consisting of eight of CF’s current directors, as well as Greg Heckman, former CEO of The Gavilon Group LLC and current OCI NV board member and Alan Heuberger, senior portfolio manager for Bill & Melinda Gates Investments (BMGI). The combined company will maintain its principal executive offices in Deerfield, Illinois and will be listed on the New York stock exchange under the ticker symbol CF.

Morgan Stanley & Co LLC and Goldman Sachs & Co are serving as financial advisors to CF Industries on the transaction. Skadden, Arps, Slate, Meagher & Flom LLP is acting as its legal advisor. Zaoui & Co is acting as lead financial advisor to OCI. Bank of America Merrill Lynch and JP Morgan are also providing financial advice to OCI. Allen & Company is advising Nassef Sawiris and the Sawiris family. Cleary Gottlieb Steen & Hamilton LLP and Allen & Overy LLP are acting as legal advisors to OCI.

© Worldofchemicals News



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