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Methanex Corporation (TSX:MX) has announced a definitive agreement to acquire OCI Global's international methanol business for $2.05 billion. This strategic acquisition includes OCI’s interests in two major methanol facilities located in Beaumont, Texas, one of which also produces ammonia. The deal also encompasses a low-carbon methanol production and marketing business as well as a currently idle methanol facility in the Netherlands.
Details of the Acquisition
The acquisition will see Methanex expand its global production capabilities significantly. The Beaumont facilities, which have been integral to OCI’s operations, offer a substantial production capacity:
- First Facility: Annual production of 910,000 tonnes of methanol and 340,000 tonnes of ammonia. This plant underwent a comprehensive upgrade with $800 million invested in capital improvements.
- Second Facility: A 50% stake in the Natgasoline plant, which has an annual capacity of 1.7 million tonnes of methanol, with Methanex’s share being 850,000 tonnes.
Additionally, Methanex will gain OCI HyFuels, which specializes in low-carbon methanol production and marketing, and a methanol facility in Delfzijl, Netherlands, with an annual production capacity of 1 million tonnes, though this facility is currently idle due to unfavorable natural gas pricing.
Strategic and Operational Benefits
Rich Sumner, President and CEO of Methanex, emphasized that this acquisition will strengthen Methanex’s global production base and align with its strategic goals of industry leadership and operational excellence. The Beaumont plants, with their access to North America's cost-effective natural gas feedstock, are expected to boost Methanex’s global methanol production by over 20%.
The acquisition also presents an opportunity for Methanex to diversify into ammonia production—a commodity with industrial, agricultural, and low-carbon fuel applications—thereby enhancing its revenue streams.
Financing and Future Steps
The cash portion of the acquisition will be financed through a combination of Methanex’s existing cash reserves and new debt issuance. The company has secured a fully committed debt financing package from Royal Bank of Canada to support the transaction.
The deal is anticipated to close in the first half of 2025, pending regulatory approvals and other closing conditions, including approval from the Toronto Stock Exchange for the issuance of Methanex shares to OCI and a simple majority vote from OCI shareholders.
Nassef Sawiris, Executive Chairman of OCI, expressed confidence in Methanex’s ability to leverage the acquisition for long-term shareholder value and highlighted the strategic fit of the transaction. Ahmed El Hoshy, CEO of OCI, also noted the positive alignment of the acquisition with Methanex’s operational and strategic goals.
