OCI Sells Wever Nitrogen Plant to Koch

OMAHA (DTN) -- Koch Ag & Energy Solutions (KAES) announced Monday that it has reached an agreement to acquire OCI Global's nitrogen fertilizer plant in Wever, Iowa, for $3.6 billion.

Once the transaction is finalized, KAES will have 100% ownership of the facility located along the Mississippi River in southeastern Iowa. The plant was opened in 2017 and has the capacity to produce 3.5 million metric tons (mmt) of nitrogen fertilizers and diesel exhaust fluid annually.

"Today's announcement is an important step forward for KAES as we continue to invest in our fertilizer business," Mark Luetters, president of KAES, stated in a news release. "This investment complements our existing business, and we look forward to advancing this transaction with OCI to completion."

According to the release, the Wever facility will be added to the existing Koch Fertilizer portfolio, which produces markets and distributes nitrogen fertilizers, diesel exhaust fluid and phosphate fertilizer products.

OCI said it launched a multifaceted strategic review in March 2023 intending to close the discount to OCI's intrinsic value and unlock value for its shareholders, according to an OCI news release. Company officials said the announcement marked an important step in delivering those objectives.

The transaction is expected to result in a reduction in holding company net debt and deliver a capital return to shareholders, according to the OCI release. The deal will also enable OCI to explore other new opportunities in the energy transition space, building on OCI's lower-carbon ammonia and green methanol platforms.

"Today's announcement marks an evolutionary step in our journey to create value for shareholder and to enhance our focus on efforts in lower carbon initiatives," said Nassef Sawiris, executive chairman of OCI.

"Iowa Fertilizer Company (IFCO) was the first world-scale greenfield nitrogen fertilizer facility built in the United States in over 25 years. We are confident that under KAES's stewardship, IFCO will be well-positioned for its next phase of growth. Our strengthened balance sheet will support the acceleration of our strategy in the field of decarbonization projects, driving future growth and supporting the energy transition goals we share with many of our stakeholders, establishing us as a leader in the low-carbon space."

IFCO is a wholly owned, indirect subsidiary of OCI. OCI brought IFCO to the market in early 2023 as a greenfield project. The facility was one of the largest private-sector construction projects in Iowa's history.

OCI's news release said the completion of the transaction remains subject to certain U.S. antitrust approval and other customary closing conditions. The transaction is expected to close in 2024. It does not require OCI's shareholders to vote on approval.

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