CF Industries, OCI plan partial merger to create world's largest nitrogen firm

CF Industries Holdings, Inc., and OCI N.V. said on Friday that they have entered into a definitive agreement under which CF will combine with OCI's European, North American and Global Distribution businesses in a transaction valued at approximately $8 billion -- based on CF's current share price -- which includes the assumption of approximately $2 billion in net debt.

The transaction, unanimously approved by both companies' boards of directors, will create the world's largest publicly traded nitrogen company.

The transaction includes OCI's nitrogen-production facilities in Geleen, Netherlands, and Wever, Iowa, and the company's interest in an ammonia and methanol facility in Beaumont, Texas, along with its global distribution business in Dubai in the United Arab Emirates.

The combined entity also would purchase a 45 percent interest, plus an option to buy the remaining interest, in OCI's Natgasoline project in Texas, which, upon completion in 2017, will be one of the world's biggest methanol facilities.

The new company will have production capacity of approximately 12 million nitrogen-equivalent nutrient tons by the middle of 2016.

"This is a terrific opportunity for the shareholders of both companies, with mid- to high-teens cash-flow accretion," Tony Will, president and CEO of CF Industries Holdings, Inc., said. "This is also a great outcome for U.S. farmers, as we have another supply point that will ensure our critical products are delivered reliably and in time to meet our customers' needs."

"Combining our businesses with CF builds upon the company's platform in Europe and expansive distribution network in North America, enhancing our collective scale and improving our ability to meet the needs of customers in the U.S. and around the world," Nassef Sawiris, CEO of OCI N.V., said. "As significant owners in the combined entity, our shareholders will benefit from the ongoing value creation of the business."


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