Methanex Corporation, a Canadian company that supplies, distributes, and markets methanol worldwide, has entered into a definitive agreement to acquire OCI Global’s international methanol business for $2.05 billion.
As part of the transaction, Methanex will acquire the following:
Methanex expects to achieve approximately $30 million of annual cost synergies from lower logistics costs and lower selling, general and administrative expenses.
Furthermore, the company anticipates low integration costs because of OCI’s similar operating model and expects that additional value can be obtained by applying its global expertise and extensive operational experience to the OCI assets.
In the future, Methanex plans to integrate key operational practices at the facilities and will incorporate the OCI assets into its global risk-based management processes including turnaround and capital planning post-closing.
Closing of the transaction is expected 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 including TSX approval for the issuance of Methanex shares to OCI.
“This is a unique opportunity to create value by acquiring two highly attractive North American methanol assets that will further strengthen our global production base and we expect it will be immediately accretive to free cash flow per share,” said Rich Sumner , President and Chief Executive Officer of Methanex.
“The Beaumont plants benefit from access to North America’s abundant and favourably-priced supply of natural gas feedstock, and are expected to increase our global methanol production by over 20 percent . We believe the transaction will provide significant long-term value to Methanex shareholders while aligning with our strategic objectives of industry leadership, operational excellence, and financial resiliency.”
“We are pleased with the opportunity to achieve a significant ownership position and are highly confident in Methanex’s ability to create enduring value for shareholders. As the global leader committed to safety and operational excellence, we identified Methanex as the natural owner of OCI Methanol at the outset of our strategic process, which we initiated in the spring of 2023,” Nassef Sawiris , Executive Chairman of OCI, added.
“This is an outstanding strategic fit for Methanex. 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,” Ahmed El Hoshy , CEO of OCI, said.
To remind, last month, Australian energy company Woodside entered into a binding agreement to acquire 100% of OCI Clean Ammonia Holding and its 1.1 million metric tonnes lower carbon ammonia project under construction in Beaumont, Texas, for an all-cash consideration of approximately $2.35 billion.