ADNOC to acquire OCI’s stake in Fertiglobe for $3.6 billion

Abu Dhabi National Oil Company PJSC (ADNOC) and OCI Global have announced that they have entered into a sale and purchase agreement (SPA) for the acquisition by ADNOC of OCI’s entire majority shareholding in Fertiglobe plc.

Fertiglobe is listed on the Abu Dhabi Securities Exchange (ADX) and is the world’s largest seaborne exporter of urea and ammonia combined, the largest nitrogen fertiliser producer in the Middle East & North Africa, and an early mover in sustainable ammonia, with production facilities in Egypt, Algeria and the UAE, the companies said.

The transaction, which will see ADNOC become majority shareholder in Fertiglobe, supports the company’s ambitious chemicals strategy and its plans to establish a global growth platform for ammonia, a key lower carbon fuel and hydrogen carrier that is expected to play an important role in the energy transition.

For Fertiglobe, this transaction supports the company’s future growth plans, enabling it to accelerate the pursuit of new market and product opportunities, and expand its focus on clean ammonia as an emerging fuel and hydrogen carrier, the company said.

Under the terms of the agreement, ADNOC will purchase OCI’s 50% + 1 share stake in Fertiglobe at a price of AED 3.20 per share, representing a total purchase price of AED 13.28 billion ($3.62 billion). The SPA also incorporates an earn-out mechanism for FY2024 and FY2025, linked to commodity pricing and the free cash flow performance of the Fertiglobe business during the relevant period, ADNOC said.

Following the completion of the transaction, ADNOC’s shareholding in Fertiglobe will increase to 86.2% while the free float traded on ADX will remain at 13.8%, it said.

“Working in close partnership with OCI since 2018, we have successfully listed and grown Fertiglobe into the world’s largest seaborne exporter of ammonia and urea fertilisers,” Khaled Salmeen, Executive Director, Downstream, Marketing & Trading Directorate at ADNOC, said.

“Today’s agreement reinforces ADNOC’s long-term commitment to Fertiglobe and our continued focus on delivering growth and maximising value for the company’s shareholders. This important transaction supports ADNOC’s ambitious chemicals growth strategy and accelerates our plan to establish a global growth platform for ammonia and clean ammonia,” he added.

Building on ADNOC and OCI’s strong and long-standing strategic partnership, the two companies have also signed a Memorandum of Understanding (MoU) to explore potential cooperation on future growth opportunities for ammonia imports into Europe and product distribution. Both partners have deep knowledge and understanding of the role that ammonia has to play in global decarbonisation and energy transition, and the MoU provides a robust framework to leverage each company’s strengths in pursuing opportunities in the energy transition and decarbonisation areas, the companies said.

“Today marks a pivotal juncture in Fertiglobe’s journey with ADNOC, which began in 2018,” Nassef Sawiris, Vice Chairman of Fertiglobe and Executive Chairman of OCI Global, said in a statement.

“Within the ADNOC Group, I am confident that Fertiglobe has found its optimal long-term home, and that with ADNOC’s continued support and guidance, significant value creation and exciting growth opportunities lie ahead. OCI looks forward to continued collaboration with ADNOC which will focus on value accretive growth projects outside the Middle East,” he added.

The transaction is expected to close in 2024, subject to the completion of all necessary legal and regulatory conditions, including anti-trust approvals.