Yara International on Tuesday said that it has signed a nonbinding heads of terms with Praxair to sell its European carbon dioxide (CO2) business for €218 million ($246.7 million). The agreement also includes selling Yara’s remaining 34% stake in the Yara Praxair Holding joint venture to Praxair for an estimated €94 million.
“The CO2 business … remains a relatively small part of the broader industrial gas industry and where Praxair is well positioned to create additional value. … [T]his agreement allows Yara to redeploy management and financial capacity” says Svein Tore Holsether, Yara’s new president and CEO.
The proposed deal is conditional upon final transaction agreements, necessary approvals from competition authorities, and other customary closing conditions. The transaction is expected to close in the first quarter of 2016 with a provisionally estimated posttax gain of €150 million, including the Yara Praxair Holding sale.
In 2014, Yara’s European CO2 business sold more than 850,000 m.t. of liquid CO2 and 50,000 m.t. of dry ice, delivering an Ebitda of €21.5 million and revenues of €112 million, primarily from the food and beverage industry. The business operates five CO2 liquefaction plants, three CO2 ships, seven ship terminals, and six dry ice production facilities.
The Yara Praxair Holding jv, operating in Scandinavia and formed in 2007, had a 2014 Ebitda of €35 million and revenues of €145 million. Yara’s exit it is regulated through a put/call option in the jv agreement.
The heads of terms also includes an agreement for Yara to supply Praxair with raw CO2, gas and continue to operate three of the CO2 liquefaction units that are integrated within Yara’s fertilizer plants. Yara operates three liquefaction plants inside the perimeter of its fertilizer plants at Ferrara, Italy; Porsgrunn, Norway; and Sluiskil, Netherlands, as well as two liquefaction plants on third-party sites at Dormagen, Germany; and Wilton, UK. Yara will continue to operate Ferrara, Porsgrunn, and Sluiskil.
By Natasha Alperowicz
Source: Chemical Week
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