BY Richard Summerfield
Methanex Corporation has agreed to acquire the methanol business of Dutch green fuel manufacturer OCI Global, in a deal worth $2.05bn.
According to a statement announcing the deal, the $2.05bn purchase price will consist of $1.15bn in cash, the issuance of 9.9 million common shares of Methanex valued at $450m (based on a $45 per share price) and the assumption of $450m in debt and leases. OCI will become the second-largest shareholder of Methanex, with about 13 percent of the company.
The deal is expected to close in the first half of 2025. The transaction has been approved by the boards of directors of both companies and is subject to receipt of certain regulatory approvals and other closing conditions.
Under the terms of the deal, Methanex, a Canadian company that supplies, distributes and markets methanol worldwide, will acquire a methanol facility in Beaumont, Texas with an annual production capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia, a 50 percent interest in a second methanol facility also in Beaumont, Texas, operated by the joint venture Natgasoline, OCI HyFuels, which produces low-carbon methanol and sells volumes with trading and distribution capabilities for renewable natural gas (RNG), and a methanol facility in Delfzijl, Netherlands with an annual capacity to produce 1 million tonnes of methanol.
Methanex expects to achieve approximately $30m of annual cost synergies from lower logistics costs and lower selling, general and administrative expenses.
“This transaction is testament to the efforts of an exceptionally talented group across OCI Methanol’s platform, who have prioritized value creation for the past 14 years,” said Bashir Lebada, chief executive of OCI Methanol Group. “We are proud of OCI’s contributions to new applications, and in pioneering the use of methanol as a fuel globally, Methanex is well positioned to leverage OCI HyFuels to accelerate the transition to a low-carbon economy.”
“We expect the acquisition to add incremental annual Adjusted EBITDA of $275 million to our expected run-rate Adjusted EBITDA of $850 million at a $350/MT realized methanol price,” said Dean Richardson, senior vice president, finance & chief financial officer at Methanex. “We remain firmly committed to maintaining financial flexibility and have in place a robust financing plan that will support de-levering to our target range of 2.5 to 3.0 times debt/Adjusted EBITDA within approximately 18 months from closing, assuming an average realized price of $350/MT. The plan includes the repayment of our $300 million bond as scheduled in December 2024.”
“This is an outstanding strategic fit for Methanex,” said Ahmed El Hoshy, chief executive of OCI. “We look forward to working closely with Methanex’s management to fully integrate the business after closing, and to ensure continuity and successful stewardship of the business.”
News: Methanex to acquire OCI's methanol business in $2.05 bln deal