OCI to Sell Stake in Fertilizer Unit to ADNOC for $3.6 Billion
The Netherlands-based OCI N.V. has agreed to sell its stake in its fertilizer unit to Abu Dhabi National Oil Company (ADNOC) for $3.6 billion. The deal is expected to close in the first quarter of 2024.
Background of OCI
OCI N.V. is a global producer of natural gas-based fertilizers and industrial chemicals. It is the largest producer of melamine in Europe and the Middle East, and the second-largest producer of methanol in the world. The company has operations in Europe, the Middle East, and North America.
Background of ADNOC
ADNOC is the state-owned oil and gas company of the United Arab Emirates. It is one of the world’s leading energy producers, with operations in more than 40 countries. ADNOC is the largest producer of crude oil in the UAE and the third-largest producer of natural gas in the Middle East.
Details of the Deal
Under the terms of the deal, OCI will sell its entire stake in OCI Fertilizer B.V. to ADNOC for $3.6 billion. OCI Fertilizer B.V. is a wholly-owned subsidiary of OCI N.V. and is the parent company of OCI Nitrogen, a leading producer of nitrogen-based fertilizers.
The deal is expected to close in the first quarter of 2024, subject to regulatory approvals and other customary closing conditions. Upon completion of the transaction, ADNOC will become the sole owner of OCI Fertilizer B.V.
Reasons for the Deal
OCI N.V. said that the sale of its stake in OCI Fertilizer B.V. is part of its strategy to focus on its core businesses and to unlock value for its shareholders. The company also said that the proceeds from the sale will be used to reduce its debt and to fund future growth opportunities.
ADNOC said that the acquisition of OCI Fertilizer B.V. will strengthen its position in the global fertilizer market and will enable it to expand its presence in the Middle East and North Africa region.
Impact of the Deal
The deal is expected to have a positive impact on both companies. For OCI N.V., the sale of its stake in OCI Fertilizer B.V. will help reduce its debt and fund future growth opportunities. For ADNOC, the acquisition of OCI Fertilizer B.V. will strengthen its position in the global fertilizer market and will enable it to expand its presence in the Middle East and North Africa region.
Future Outlook
The deal is expected to close in the first quarter of 2024, subject to regulatory approvals and other customary closing conditions. Upon completion of the transaction, ADNOC will become the sole owner of OCI Fertilizer B.V.
The sale of OCI N.V.’s stake in OCI Fertilizer B.V. is part of its strategy to focus on its core businesses and to unlock value for its shareholders. The acquisition of OCI Fertilizer B.V. by ADNOC will strengthen its position in the global fertilizer market and will enable it to expand its presence in the Middle East and North Africa region.
Both companies are expected to benefit from the deal, and it will be interesting to see how the transaction will impact their respective businesses in the future.