OCI to sell Iowa Fertilizer Co. to Koch for $3.6bn

The Dutch fertilizer maker OCI NV announced on Monday that it has agreed to sell its US crop nutrient business, Iowa Fertilizer Co., to Koch AG & Energy Solutions for $3.6bn on a tax-free basis. OCI said that it expects the deal to close in 2024, subject to US regulatory approvals and other customary closing conditions.

It comes after OCI on Friday agreed to sell its 50% stake in the joint nitrogen and ammonia venture Fertiglobe to Abu Dhabi’s national oil and gas company, ADNOC, for $3.62bn.

OCI said the latest divestiture will enable it to reduce its debt and boost its stock valuation. It added that the transaction will also ensure it can ‘explore incremental value accretive opportunities in the energy transition space, building on its early mover lower-carbon ammonia and green methanol platforms.’

OCI’s CFO, Hassan Badrawi, noted that: ‘Combined with the recent sale of Fertiglobe, OCI is crystallizing $7.2bn of tax-free gross cash proceeds.’ That is considerably greater than the whole company’s market value of $4.6bn before the sales were announced.

Badrawi indicated that OCI will distribute some of the proceeds from the latest transaction to shareholders.