Business Strategy OCI Global to Sell Global Methanol Business to Methanex

Related Vendors

Angst+Pfister AG

Maag Pump Systems AG

TRM Filter d.o.o.

Under an agreement signed between both the parties, OCI Global will sell its Global Methanol Business to Methanex Corporation for 2.05 billion dollars on a cash-free and debt-free basis.

Amsterdam/The Netherlands – OCI Global has reached an agreement for the sale of 100 % of its equity interests in its Global Methanol Business (OCI Methanol) to Methanex Corporation (Methanex) for a total consideration of 2.05 billion dollars on a cash-free and debt-free basis (the Transaction).

Purchase price consideration of 2.05 billion dollars on a cash-free and debt-free basis (Enterprise Value or Transaction Consideration) following a competitive process.

The Transaction Consideration will be paid through a combination of approximately 1.15 billion dollars of cash (taking into account expected net indebtedness) subject to customary closing adjustments, and the issuance of 9.9 million of common shares of Methanex (Methanex Shares). The Methanex Shares provide OCI with the opportunity to participate in potential upside from the Transaction such as improvements in operations of the combined business and potential improvements in the methanol industry cycle. OCI is expected to become an approximately 13 per cent shareholder, and the second largest shareholder in Methanex following the Transaction.

The Transaction is expected to close in the first half of 2025 subject to satisfaction of certain regulatory approvals, customary closing conditions, and receipt of OCI shareholder approval. OCI's Board of Directors has approved the Transaction and has recommended that its shareholders approve the Transaction. An agreement to vote for the Transaction has been signed by the largest shareholder of OCI with an interest of approximately 39 percent in the Company.

Proceeds from the Transaction will be considered alongside expected proceeds from OCI's previously announced divestitures in Ifco, Fertiglobe and OCI Clean Ammonia (the Divestitures). Cumulatively, the Divestitures are expected to crystallize approximately 11.6 billion dollars of gross proceeds for OCI and will afford the Company considerable flexibility to unlock value for all its stakeholders. Proceeds will be prioritized to significantly reduce OCI holding company gross debt and to return capital to shareholders. Future guidance on OCI's capital allocation framework will be provided in due course.

Transaction details

Under the proposed Transaction, Methanex will acquire 100 % of the equity interests in OCI Methanol, comprising 100 % of OCI's US and European methanol assets respectively. OCI Methanol is indirectly owned 85 % by OCI and 15 % by its partners Alpha Dhabi Holding PJSC and ADQ.

The Transaction Consideration will be paid through a combination of approximately 1.15 billion dollars of cash (taking into account net indebtedness) subject to customary closing adjustments, and the issuance of 9.9 million of common shares of Methanex (Methanex Shares). Based on a price of 45 dollars per share, Methanex share consideration of 9.9 million is valued at 450 million dollars, resulting in OCI ownership in enlarged Methanex of approximately 13 per cent. Financing is not a condition precedent for the Transaction.

The sale of OCI Methanol's indirect 50 % stake in the Natgasoline joint venture (Natgasoline) as part of the Transaction is subject to the resolution of a lawsuit filed in the Delaware Court of Chancery by Proman (CEL) (Proman), which indirectly owns the remaining 50 % stake in Natgasoline. Forty percent of the gross Transaction Consideration and 23 % of the net Transaction Consideration (taking into account net indebtedness) - or 23 % of the implied equity value - is attributable to Natgasoline. OCI believes that Proman's claims are without merit.

The Transaction is expected to close in the first half of 2025 subject to satisfaction of certain regulatory approvals, customary closing conditions, and receipt of OCI shareholder approval. OCI's Board of Directors has approved the Transaction and has recommended that its shareholders approve the Transaction. An agreement to vote for the Transaction has been signed by the largest shareholder of OCI with an interest of approximately 39 percent in the Company.

(ID:50159757)