OCI Global Secures U.S. Approval for $1.2 Billion Sale of Methanol Business to Methanex Corporation

OCI Global Gains Regulatory Approval for Methanol Business Sale

In a significant move for the methanol industry, OCI Global has announced receiving regulatory approval from the U.S. authorities concerning its sale of the Global Methanol Business to Methanex Corporation. This approval comes under the U.S. Hart-Scott-Rodino Antitrust Act and marks a critical step toward the completion of the transaction, which is anticipated to close on June 27, 2025.

Details of the Transaction

The agreement involves the acquisition of 100% equity interests in OCI Methanol, which includes all of OCI's methanol assets in both the U.S. and Europe. The total consideration for this sale is approximately $1.2 billion in cash (subject to customary closing adjustments) and the issuance of 9.9 million common shares of Methanex. This deal positions Methanex as a leading player in the methanol market, further solidifying its global influence.

Tender Offer Implications

As part of the transaction, OCI Global will also be executing a tender offer for its 6.700% Notes due 2033, valued at $600 million. This tender offer will be launched within five business days after the successful closing of the methanol business transaction, expected to offer a price of 110.75% of par value alongside accrued and unpaid interest.

OCI Methanol: A Snapshot of Operations

OCI Methanol stands out as a prominent methanol producer in the United States, renowned for its production capabilities and strategic assets. Major facilities include a methanol production plant in Beaumont, Texas, boasting an annual production capacity of 910,000 tonnes, alongside a joint venture operation with Natgasoline in the same locale, which has an annual capacity of 1.7 million tonnes.

Alongside traditional methanol production, OCI's subsidiary, OCI HyFuels, is recognized for producing low-carbon methanol and renewable natural gas, driving innovation in eco-friendly fuel alternatives. Further operational assets also extend to a methanol facility in Delfzijl, Netherlands, capable of producing another million tonnes annually, though it is currently not operational due to unfavorable natural gas pricing.

These assets are strategically located in high-demand industrial areas and important bunkering hubs, affording OCI Methanol robust distribution and storage capabilities that enhance market supply efficacy. Supported by low-cost supply from the U.S. Gulf Coast, OCI Methanol can maintain a competitive edge within the market.

The Bigger Picture: Methanex Corporation

Methanex Corporation, headquartered in Vancouver, is recognized as the world’s largest producer and supplier of methanol. With shares trading on both the Toronto Stock Exchange and the Nasdaq, Methanex is well-positioned to expand its reach and strengthen its supply chains further through the acquisition of OCI’s assets. This strategic deal aligns with Methanex's objectives to enhance production capabilities and to create a robust supply chain that meets global energy demands efficiently.

Conclusion

The regulatory approval marks a pivotal moment for both OCI Global and Methanex Corporation as they aim to reshape the methanol market landscape. With an expected closure of this transaction within the month, industry observers are keenly observing the potential implications for global supply, pricing, and future strategic developments in the renewable energy sector.