Adnoc gets the green light for Fertiglobe acquisition

The EU gives its stamp of approval for Adnoc’s acquisition of Fertiglobe: The European Commission has approved The Abu Dhabi National Oil Company (Adnoc)’s acquisition of OCI Global’s stake in Fertiglobe, according to a European Commission (EC) statement published last week. OCI Global previously held a 50% +1 stake in their joint venture Fertiglobe for AED 13.28 bn (c.USD 3.62 bn).

This has been in the works: The two companies signed a binding agreement to offload OCI’s 51% stake in Fertiglobe in December. Adnoc’s shares in Fertiglobe were said to have increased to 86.2% at the time, with the remaining in freefloat on the Abu Dhabi Securities Exchange. Fetiglobe shares were priced at an 8% premium at AED 3.20 (c.USD 0.87) per share, OCI said in December.

What Adnoc stands to gain: The acquisition aims to boost the production and distribution of nitrogen fertilizers by Fetiglobe, according to the EC statement. In its active form — including as a fertilizer — nitrogen is a key contributor to climate change as it releases nitrous oxide — a gas that is 300 times more potent at warming the atmosphere than carbon dioxide, according to the UN Environment Programme.

A shift in goals? In previous statements last December, it was noted that the acquisition of OCI’s stakes is part of a company drive to expand its global ammonia production network, in efforts to grow a platform for the low-carbon fuel which also serves a (green) hydrogen carrier.

Fertiglobe is positioning itself as a major ammonia player: Fertiglobe sent the world’s first ISCC PLUS-certified (International Sustainability and Carbon Certification) green ammonia shipment to India from its electrolyzer facility in Egypt’s Suez Canal Economic Zone in December. Fertiglobe, alongside Adnoc-ADQ JV Ta’ziz, GS Energy, and Mitsui, has also signed a shareholder agreement to construct a facility to produce some 1 mn tons of low-carbon ammonia annually in the UAE. The company is currently studying another green hydrogen project in the UAE in collaboration with Masdar and Engie.

Not the first or last partnership between Adnoc and OCI: Both sides inked an MoU to explore importing and distributing ammonia in the EU in December. The agreement will see the two explore joint investments in decarbonization and product distribution projects in North America and Europe. OCI is also considering offering its US crop nutrient unit Iowa Fertilizers to Adnoc for more than USD 3 bn.