Canadian methanol producer Methanex has entered into a definitive agreement to acquire OCI’s international methanol business for $2.05bn (C$2.78bn).
The total purchase price includes $1.15bn in cash, the issuance of 9.9 million Methanex common shares worth $450m, and the assumption of $450m in debt and leases.
This acquisition includes interests in two methanol facilities in Beaumont, Texas, one of which also produces ammonia, a low-carbon methanol production and marketing business, and an idled methanol facility in the Netherlands.
Methanex said it expects to achieve approximately $30m of annual cost synergies from lower logistics costs and lower selling, general and administrative expenses.
The transaction also presents Methanex with a low-risk entry into the ammonia market, which is synergistic with its methanol production.
Ammonia’s potential as a low-carbon alternative fuel for power generation and marine applications offers Methanex a revenue diversification opportunity.
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By GlobalDataAs part of the acquisition, Methanex will obtain a methanol facility in Beaumont with an annual production capacity of 910,000 tonnes (t) of methanol and 340,000t of ammonia.
Methanex will acquire a 50% interest in the Natgasoline plant, also in Beaumont, with an annual capacity of 1.7 million tonnes of methanol.
The acquisition also includes OCI HyFuels, which specialises in low-carbon methanol production and distribution, and a methanol facility in Delfzijl, Netherlands, currently idled due to unfavourable natural gas pricing.
Methanex president and CEO Rich Sumner said: “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.”
The transaction is expected to close in the first half of 2025, subject to regulatory approvals and other closing conditions.
Both companies’ boards of directors have approved the deal.
