OCI sells US methanol Unit to Methanex for US$2 bn
Dutch hydrogen products supplier OCI Global announced that it has reached an agreement for the sale of 100% of its equity interests in its Global Methanol Business (OCI Methanol) to Methanex Corporation for a total consideration of US$2.05 billion on a cash-free and debt-free basis.
OCI Methanol is a leading methanol producer in the US and through OCI HyFuels, a leading producer and distributor of green methanol today. OCI Methanol’s total productive capacity comprises the following assets:
- A methanol facility in Beaumont, Texas with an annual production capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia. This plant was restarted in 2011 and since that time the plant has been upgraded with US$800 million of capital for full site refurbishment and debottlenecking.
- A 50% interest in a second methanol facility also in Beaumont, Texas, operated by Natgasoline, which is a joint venture with Proman. The Natgasoline plant was commissioned in 2018 and has an annual capacity of 1.7 million tonnes of methanol, of which Methanex’s share will be 850,000 tonnes.
- OCI’s HyFuels business, which produces and sells industry-leading volumes of low-carbon methanol and has trading and distribution capabilities for renewable natural gas (RNG).
- A methanol facility in Delfzijl, Netherlands with an annual capacity to produce 1 million tonnes of methanol. This facility is not currently in production due to unfavourable pricing for natural gas feedstock.
- Under the proposed Transaction, Methanex will acquire 100% of the equity interests in OCI Methanol, comprising 100% of OCI’s US and European methanol assets respectively. OCI Methanol is indirectly owned 85% by OCI and 15% by its partners Alpha Dhabi Holding PJSC and ADQ.
- The transaction consideration will be paid through a combination of approximately US$1.15 billion of cash (taking into account net indebtedness) subject to customary closing adjustments, and the issuance of 9.9 million of common shares of Methanex. Based on a price of US$45 per share, Methanex share consideration of 9.9 million is valued at US$450 million, resulting in OCI ownership in enlarged Methanex of approximately 13%. Financing is not a condition precedent for the Transaction.
- The sale of OCI Methanol’s indirect 50% stake in the Natgasoline LLC joint venture as part of the Transaction is subject to the resolution of a lawsuit filed in the Delaware Court of Chancery by Proman (CEL), which indirectly owns the remaining 50% stake in Natgasoline. Almost 40% of the gross Transaction Consideration and 23% of the net Transaction Consideration (taking into account net indebtedness) – or 23% of the implied equity value – is attributable to Natgasoline. OCI believes that Proman’s claims are without merit.
- The Transaction is expected to close in the first half of 2025 subject to satisfaction of certain regulatory approvals, customary closing conditions, and receipt of OCI shareholder approval.
