Methanex to acquire OCI’s methanol business for $2bn

Spanish Market: Biofuels, Fertilizers, Hydrogen, Natural gas, Petrochemicals
09/09/24

Methanol producer Methanex announced Sunday that it will acquire OCI's international methanol business for $2.05bn.

As part of the transaction, Methanex will acquire four primary assets, including a 910,000 t/yr methanol facility and 340,000 t/yr ammonia facility in Beaumont, Texas.

Methanex will acquire OCI's 50pc interest in the 1.7m t/yr Natgasoline methanol plant in Beaumont. The acquisition of Natgasoline is subject to a legal proceeding between OCI and Proman, the other 50pc holder in Natgasoline, over certain shareholder rights. If the dispute is not resolved within a certain period, Methanex has the option to exclude the purchase of the Natgasoline joint venture and proceed with the rest of the transaction.

The transaction also includes OCI HyFuels, a producer of green methanol products such as biomethanol and bio-MTBE, and trading and distribution capabilities for renewable natural gas (RNG) and ethanol. Additionally, Methanex will acquire an idled 1m t/yr methanol facility in Delfzijl, Netherlands.

The purchase price includes $1.15 billion in cash, the issuance of 9.9 million shares of Methanex valued at $450 million and the assumption of about $450 million in debt and leases.

The acquisition of fertilizer producer OCI began over a year ago, according to OCI officials.

"We identified Methanex as the natural owner of OCI Methanol at the outset of our strategic process, which we initiated in the spring of 2023," OCI executive chairman Nassef Sawiris said.

This acquisition moves Methanex, primarily a methanol maker, into the ammonia sector.

"From an operating perspective, we have a shared culture of safety and operational excellence, and we expect the OCI team will help us build new skills in ammonia while enhancing our capabilities in the evolving business of low carbon methanol production and marketing," Methanex CEO Rich Sumner said.

The deal is expected to close in the first half of 2025. The transaction has been approved by the boards of directors of the two companies and is now awaiting certain regulatory approvals and other closing conditions.

The transaction is also subject to approval by a simple majority of the shareholders of OCI. The largest shareholder of OCI, has signed an agreement to vote for the transaction.

By Steven McGinn

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