CF Industries, one of the leading nitrogen producers in the US, has agreed to buy the European and North American production facilities, as well as the global distribution business, of its Dutch rival OCI, in a deal valued close to $8bn (€7.2bn).
As part of the deal, the two companies will create a new holding company under the name CF, which will be domiciled in the UK. CF will hold a 72.3% stake in the new entity, with the remaining 27.7% under the control of OCI.
By shifting its headquarters from the US to the UK, CF Industries will significantly lower its corporate tax rate from 34% down to about 20%. The new company will be the world’s largest publicly traded nitrogen company, with production capacity close to 12m nitrogen-equivalent tonnes.
Production facilities
The production facilities CF will acquire from OCI are situated in the Netherlands and the US state of Iowa. CF will also acquire OCI’s 45% interest in an ammonia and methanol facility located in Texas, along with the group’s global distribution business based in Dubai. OCI’s production facilities in Egypt and Algeria are excluded from the deal.
Earlier this year, CF took full control of the UK’s largest fertiliser company, GrowHow, after it acquired it from Yara for more than $1.16bn (€1.05bn). CF says this latest acquisition will complement its GrowHow business, creating synergies that will save approximately $500m over the coming years.
CF said it also expects to increase production capacity by almost two thirds over the next 24 months.