#None #Methanex Corporation #OCI Global #Methanol Business

OCI Global's Strategic Move: Sale of Methanol Business to Methanex Corporation

OCI Global (Euronext: OCI) recently secured a significant milestone in its corporate strategy by obtaining regulatory approval from U.S. authorities under the Hart-Scott-Rodino Antitrust Act. This approval clears the way for OCI to finalize the sale of its Global Methanol Business, known as OCI Methanol, to Methanex Corporation (TSX: MX, Nasdaq: MEOH). The transaction, valued at around $1.2 billion, will allow Methanex to acquire 100% of OCI's equity interests in its methanol assets located in the U.S. and Europe, and is projected to close by June 27, 2025, subject to customary conditions.

Background of the Transaction

The decision to sell OCI Methanol aligns with OCI Global's vision of streamlining operations and maximizing value for stakeholders. Methanex, the world's foremost supplier and producer of methanol, is set to enhance its footprint with the integration of OCI's robust assets. The deal stands apart not just for its financial implications but also for its strategic importance in the global methanol market.

Methodology of the sale involves Methanex providing cash compensation of approximately USD 1.2 billion while simultaneously issuing 9.9 million common shares. This blend of cash and shares demonstrates a commitment from Methanex to invest deeply in the future of the combined operations.

OCIs methanol production assets include:

• - A facility in Beaumont, Texas, which produces 910,000 tonnes of methanol annually and has undergone an extensive refurbishment for enhanced efficiency.
• - A joint venture with Natgasoline, also in Beaumont, Texas, contributing an additional annual capacity of 850,000 tonnes of methanol.
• - A large-scale methanol facility in Delfzijl, Netherlands, with a capacity for 1 million tonnes, which is not currently operational due to market conditions.

Implications for OCI Global

This transaction is not merely a financial maneuver; it also paves the way for OCI to focus on emerging opportunities in the chemical sector, particularly in low-carbon fuels. OCI's HyFuels division, which specializes in low-carbon and renewable fuels, stands to benefit significantly from the divestiture, enabling a sharper focus on sustainable innovations. Following the successful closing of the transaction, OCI plans to launch a tender offer for its USD 600 million 6.700% Notes due in 2033, ensuring an efficient management of its financial liabilities while tapping into new growth avenues.

Future Prospects with Methanex

For Methanex, the acquisition of OCI Methanol enhances its operational capabilities in North America and Europe, strategically positioning itself to cater to growing industrial demands for methanol. Methanex's existing market strength combined with OCI’s diverse asset base allows for a strengthened competitive edge in global markets. As the chemical industry increasingly seeks to adapt to regulatory changes around emissions, this diversified portfolio will bolster Methanex's footprint in emerging markets for renewable energy solutions.

This bold step moves both companies closer to achieving enhanced operational efficiencies and strategic ambitions, ultimately serving to advance their positions in an evolving market landscape. The merger not only emphasizes growth through consolidation but also highlights the industry’s transition toward more sustainable practices.

As OCI Global and Methanex Corporation prepare for the transaction's completion, stakeholders across all levels are keenly watching how this partnership unfolds, especially in the context of low-carbon initiatives that are becoming increasingly vital for long-term sustainability and regulatory compliance in the industry.