Methanex to acquire OCI Global’s methanol business for US$2B

• Methanex (TSX:MX) has entered into an agreement to acquire all of OCI Global’s international methanol business for US$2.05 billion
• The acquisition includes OCI’s interest in two methanol facilities in Beaumont, Texas, with one of them also producing ammonia
• Through the transaction, the company will also acquire a low-carbon methanol production and marketing business and a methanol facility in the Netherlands that is currently inactive
• Shares of Methanex are down 5.97 per cent to C$54.16 as of 11:28 am ET

Methanex (TSX:MX) is gearig up to acquire all of OCI Global’s international methanol business in a transaction valued at US$2.05 billion.

In a news release, the company stated the acquisition includes OCI’s interest in two methanol facilities in Beaumont, Texas, with one of them also producing ammonia.

The Beamount methanol facility has an annual production capacity of 910,000 tons of methanol and 340,000 tons of ammonia.

Methanex will also acquire a 50 per cent interest in a second Beaumont methanol facility operated by joint venture Natgasoline LLC. The plant was commissioned in 2018 and has an annual capaicty of 1.7 million tons of methanol, which means the company’s share will total 850,000 tons.

Methanex also acquires the rights to a methanol facilty in the Netherlands with an annual capacity of 1 million tons of methanol but is currently inactive because of unfavourable pricing for natural gas feedstock.

“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,” Rich Sumner, CEO of Methanex, said in a statement. “The Beaumont plants benefit from access to North America’s abundant and favourably priced supply of natural gas feedstock and are expected to increase our global methanol production by over 20 per cent.”

Additional terms of the acquisition include Methanex achieving roughly $30 million of annual cost synergies from logistics costs as well as lower selling, general and administrative expenses.

Upon the closing of Methanex’s acquisition of the assets, OCI Global will retain a 13 per cent ownership interest.

Notably, OCI’s methanol business model adds to Methanex’s asset portfolio with assets in a low-risk jurisdiction that has economic supply of feedstock natural gas.

The transaction has been approved by both companies’ boards of directors and is expected to close in the first half of 2025.

Methanex is a Vancouver-based company and is one of the world’s largest suppliers of methanol.

Shares of Methanex are down 5.97 per cent to C$54.16 as of 11:28 am ET.

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