Sector News

CF Industries and OCI confirm discussions regarding possible merger

July 20, 2015
Chemical Value Chain
OCI NV (Amsterdam) and CF Industries on Monday confirmed that they are holding discussions about possible combinations or transactions of their businesses. “There can be no assurance that these discussions will result in a definitive agreement. OCI does not intend to further comment on these matters at this stage and will make future announcements if and when appropriate,” OCI said in a statement.
 
CF Industries said that it is in preliminary discussions with OCI NV regarding a potential combination involving certain of OCI’s businesses. “There can be no assurances that these discussions will result in any transaction,” CF Industries said.
 
Last week the Wall Street Journal reported that CF Industries is in advanced merger talks with OCI NV, citing “people familiar with the matter.”
 
OCI is a leading global nitrogen fertilizers and methanol producer with plants in the Netherlands, the United States, Egypt and Algeria. Its current combined capacity is 8.4 million m.t./year, which is due to rise to 12.6 million m.t./year by 2017. The company is adding capacity at its Sorfert fertilizer subsidiary in Algeria and is due to complete construction in the fourth quarter of this year of Iowa Fertilizer Co., a world scale greenfield nitrogen fertilizer complex. The complex will be designed to produce 420,000 m.t./year of urea and 1.5 million m.t./year of urea ammonium nitrate and will have 195,000 m.t./year surplus ammonia for sale on the market. In addition, OCI is establishing Natgasoline, a greenfield methanol facility with capacity for 1.75 million m.t./year, which is expected on stream in 2017 at OCI’s site near Beaumont, TX.
 
CF Industries is a global leader in nitrogen products, serving both agricultural and industrial customers. It operates manufacturing complexes in central United States and Canada. The company is in the process of buying Yara International’s 50% stake in their GrowHow fertilizer joint venture in the United Kingdom. CF Industries also owns an ammonia production facility in Trinidad. 
 
CF Industries’ statement that it is considering a merger of certain businesses, may imply that methanol will not be included in the transaction as CF Industries does not make the product. OCI’s methanol capacity will rise to 3.12 million m.t./year in 2017. The company recently gained a foothold in the European methanol market by acquiring BioMCN, which owns a 440,000-m.t./year plant at Delfzijl, Netherlands. 
 
Analysts say that a deal could be structured as a so-called tax inversion, in which the US company would move its domicile to another country. In 2014, CF Industries generated sales of $4.7 billion while OCI’s revenues reached $2.7 billion.
 
By Natasha Alperowicz
 

comments closed

Related News

May 15, 2022

New York’s EPR and packaging reduction bills lauded as game-changers in plastic pollution battle

Chemical Value Chain

The US State of New York is introducing two new bills to combat over-packaging, poor recycling rates and litter issues, including an Extended Producer Responsibility (EPR) program requiring companies such as McDonald’s and Amazon to pay for the cost of packaging disposal and recycling.

May 15, 2022

Borealis and Reclay launch entity focused on lightweight packaging 

Chemical Value Chain

The new organization’s mission is to redesign the critical steps of the plastics sorting and recycling system for post-consumer lightweight packaging (LWP) to speed up circularity, born from a need to meet the rising market demand for high-quality recyclates for use in high-end plastic applications.

May 15, 2022

Starbucks and Hubbub launch reusable packaging fund as COVID-19 diminishes consumer appetite

Chemical Value Chain

Starbucks and Hubbub have launched a £1 million (US$1.22 million) “Bring It Back Fund” to increase the uptake of reusable packaging in the F&B industry. The funding will go toward innovative ideas that make it easier for customers to use alternatives to single-use packaging by supporting pilot projects that help shift consumption habits.