OCI sheds global methanol business for USD 2bn

Netherlands-based hydrogen products company OCI Global (AMS:OCI) has signed a deal to sell its entire Global Methanol Business, referred to as OCI Methanol, to Vancouver-based Methanex Corporation (TSE:MX) for USD 2.05 billion (EUR 1.86bn) on a cash-free and debt-free basis.

The transaction includes OCI’s interest in two world-scale methanol facilities in Beaumont, Texas, one of which also produces ammonia, as well as a low-carbon methanol production and marketing business called OCI HyFuels, and a currently idled methanol facility in the Netherlands. The HyFuels business, in particular, produces and sells low-carbon methanol and has trading and distribution capabilities for renewable natural gas (RNG).

Do you know we have a daily hydrogen newsletter? Subscribe here for free!

OCI Global said in a statement that it picked Methanex as the new owner of OCI Methanol following a competitive process that was initiated in the spring of 2023. Due to the cash-and-stock nature of the agreed purchase price, the seller of the business expects to obtain a stake of about 13% in the buyer.

“Combined with the recent divestitures, OCI is crystallising approximately USD 11.6 billion of expected tax-free gross proceeds. The resulting financial profile provides significant flexibility to achieve all OCI’s goals, including the ability to meaningfully return capital to shareholders,” said Hassan Badrawi, CFO of OCI.

The transaction should close in the first half of next year, subject to receiving the necessary regulatory and shareholder approvals. The largest shareholder of OCI, with an interest of some 39%, has already agreed to vote in favor of the deal.

It should be noted as well that the sale of OCI Methanol’s indirect 50% stake in the Natgasoline joint venture, owner of the second plant in Beaumont, is subject to the resolution of a lawsuit filed by the owner of the remaining 50% stake in Natgasoline, namely Proman. “OCI believes that Proman’s claims are without merit,” the company says in its statement.

(USD 1.0 = EUR 0.906)