Methanex Corporation, one of the world’s largest methanol producers, has announced a definitive agreement to acquire OCI Global’s international methanol business for $2.05 billion. The acquisition includes OCI’s interests in two major methanol facilities in Beaumont, Texas—one of which also produces ammonia—as well as a low-carbon methanol production and marketing business, and an idled methanol facility in the Netherlands.
Strengthening Global Presence
Rich Sumner, President and CEO of Methanex, emphasized that the acquisition represents a significant opportunity for the company. “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. We expect it will be immediately accretive to free cash flow per share,” said Sumner.
The Beaumont facilities will benefit from North America’s plentiful and competitively priced natural gas feedstock. These new assets are expected to increase Methanex’s global methanol production by over 20%. The acquisition aligns with Methanex’s broader goals of industry leadership, operational excellence, and financial resiliency.
Strategic Synergies
The acquisition is also expected to generate approximately $30 million in annual cost synergies, thanks to lower logistics costs and reduced selling, general, and administrative expenses. Sumner highlighted Methanex’s ability to leverage its global expertise and operational experience to integrate OCI’s assets into its broader portfolio efficiently. This includes implementing key operational practices and risk management processes at the newly acquired facilities.
In addition to methanol, OCI’s ammonia production provides Methanex with a low-risk entry into this complementary commodity. Ammonia is not only critical for industrial and agricultural uses but also offers potential as a low-carbon alternative fuel for power generation and marine transportation.
OCI’s Confidence in Methanex’s Stewardship
Nassef Sawiris, Executive Chairman of OCI, expressed confidence in Methanex’s ability to maximize value for shareholders. “We identified Methanex as the natural owner of OCI Methanol at the outset of our strategic process,” Sawiris stated, adding that Methanex’s commitment to safety and operational excellence made it the ideal buyer for OCI’s assets.
Ahmed El Hoshy, CEO of OCI, also highlighted the strong strategic fit between the two companies, noting that Methanex’s management is well-positioned to integrate the business seamlessly after the transaction’s closing.
Details of the Acquisition
Methanex will acquire:
- A methanol facility in Beaumont, Texas, with a capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia.
- A 50% stake in the Natgasoline LLC joint venture, which operates a second methanol facility in Beaumont, producing 1.7 million tonnes of methanol annually (850,000 tonnes attributed to Methanex).
- OCI HyFuels, a low-carbon methanol production and marketing business.
- A currently idled methanol facility in Delfzijl, Netherlands, with a capacity of 1 million tonnes.
The $2.05 billion purchase price consists of $1.15 billion in cash, 9.9 million shares of Methanex valued at $450 million, and the assumption of $450 million in debt and leases. Methanex plans to fund the cash portion through a combination of cash on hand and new debt issuance, with Royal Bank of Canada providing a fully committed debt financing package to support the transaction. Upon completion, Methanex will have approximately 77 million shares outstanding, with OCI holding around 13% ownership.
The deal is expected to close in the first half of 2025, pending regulatory approvals, approval by OCI’s shareholders, and the resolution of legal proceedings related to the Natgasoline joint venture. Methanex retains the option to exclude the Natgasoline stake from the acquisition if the legal matters are not resolved in a timely manner.
About OCI Global
OCI Global is a leading producer and distributor of nitrogen, methanol, and hydrogen products. It is committed to providing cleaner energy solutions and driving the decarbonization of energy-intensive industries. Through its diverse portfolio and global operations, OCI is positioned as a key player in the low-carbon fuel market.
About Methanex
Methanex Corporation is a Vancouver-based, publicly traded company and one of the world’s leading suppliers of methanol. The company is listed on the Toronto Stock Exchange under the symbol “MX” and the NASDAQ Global Market under the symbol “MEOH.”
Source Methanex Corporation