CF Industries Holdings, Inc., and OCI N.V. on Thursday announced a definitive agreement under which 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 has been unanimously approved by the boards of directors of both companies, will create the world's largest publicly traded nitrogen fertilizer company.
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, United Arab Emirates.
The combined entity will also purchase a 45% 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 tons by mid-year 2016.
Tony Will, president and chief executive officer of CF, said the deal is a "great outcome for U.S. farmers" as the company will have another supply point that will ensure delivery is reliable and meets customers' needs.
Nassef Sawiris, chief executive officer, OCI N.V., said combining the 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."
The transaction is expected to increase CF's effective nitrogen capacity per share by 18%, as measured by the increase in the company's nitrogen-equivalent production capacity per share, adjusted for effective tax rate impacts, from 25 to 30 tons per thousand shares.
For more details on the transaction, visit the CF Industries website.
Source: CF Industries