Canadian Manufacturing

CF Industries, OCI N.V. agree to US$8B merger

The transaction will create the world’s largest publicly traded nitrogen company



DEERFIELD, Ill. & AMSTERDAM—Agricultural and industrial chemical maker CF Industries Holdings, Inc. is merging with European chemical firm OCI N.V. in a deal valued at about US$8 billion.

That value, which is based on current share prices, includes the assumption of approximately $2 billion in net debt.

The transaction will create the world’s largest publicly traded nitrogen company. It includes OCI’s nitrogen production facilities in Geleen, Netherlands, and Wever, Iowa, and the company’s interest in an ammonia and methanol complex in Beaumont, Texas, along with its global distribution business based in Dubai, United Arab Emirates. The combined entity will also purchase a 45 percent interest plus an option to acquire the remaining interest in OCI’s Natgasoline project in Texas, which upon completion in 2017 will be one of the world’s largest methanol facilities.

On a combined basis the company will have production capacity of approximately 12 million nitrogen-equivalent nutrient tons by mid-year 20161.

The transaction is expected to increase CF’s effective nitrogen capacity per share by 18 per cent, as measured by the increase in the company’s nitrogen-equivalent production capacity per share, adjusted for effective tax rate impacts, from 25 to 30 tons per thousand shares.

Under the terms of the agreement, CF will become a subsidiary of a new holding company in the U.K. OCI will contribute its European, North American and Global Distribution businesses to the new UK company in exchange for shares equal to a fixed 25.6 per cent of the new company, plus $700 million of consideration to be paid in a mix of cash or shares.

CF shareholders would own approximately 72.3 percent of the new company and OCI would own approximately 27.7 percent.

The initial board of the new corporation will have 10 directors, and the combined company will maintain its principal executive offices in Deerfield and will be listed on the New York Stock Exchange under the ticker symbol CF.

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