0
Home
News
Directory
E-newsletter
Magazine
Events
Data
AgReport
Subscribe
CF Industries will combine with OCI to create world largest nitrogen company
Aug. 7, 2015
CF Industries Holdings, Inc.
United StatesFollow
United States
CF Industries Holdings, Inc. (NYSE:CF) and OCI N.V. (NYSE Euronext:OCI) recently announced 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.
Two company will create the world's largest publicly traded nitrogen company. On a combined basis the company will have production capacity of approximately 12 million nitrogen-equivalent nutrient tons by mid-year 2016.
Upon completion of the transaction and based on the current share price, CF shareholders would own approximately 72.3 percent of the new company and OCI would own approximately 27.7 percent.
The transaction is expected to increase CF's effective nitrogen capacity per share by 18 percent, 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 shares2.
Under the terms of the agreement, CF will become a subsidiary of a new holding company domiciled in the United Kingdom, where CF is the largest fertilizer producer following its recent acquisition of GrowHow. Additionally, the new CF will have an agreement to purchase a 45 percent interest in Natgasoline for approximately $500 million in cash.
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 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.
OCI will contribute its European, North American and Global Distribution businesses to the new UK company in exchange for shares equal to a fixed 25.6 percent of new CF plus $700 million of consideration to be paid in a mix of cash or shares at new CF's discretion, of which $550 million is assumed to be paid in shares.
"This is a terrific opportunity for the shareholders of both companies, with mid- to high-teens cash flow accretion," said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. "This is also a great outcome for U.S. farmers as we have another supply point that will ensure our critical products are delivered reliably and in-time to meet our customers' needs."
"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, chief executive officer, OCI N.V. "As significant owners in the combined entity, our shareholders will benefit from the ongoing value creation of the business."
More from AgroNews
Change
Hot TopicSubscribe
| Subscribe Email: | * | |
| Name: | ||
| Mobile Number: | ||
Comment
0/1200
NEWSLETTER