ADNOC to acquire OCI’s stake in nitrogen fertilizer producer Fertiglobe for $3.6bn

Abu Dhabi National Oil Company P.J.S.C. (ADNOC) has announced a significant agreement to acquire OCI Global (Euronext: OCI)’s majority shareholding in Fertiglobe plc for AED 13.28 billion ($3.62 billion). This transaction, which is set to close in 2024, will make ADNOC the majority shareholder in Fertiglobe, a leading player in the global ammonia and nitrogen fertilizer market.

Details of the Transaction

Under the sale and purchase agreement (SPA), ADNOC will acquire OCI’s 50% + 1 share stake in Fertiglobe. The transaction also includes an earn-out mechanism for fiscal years 2024 and 2025, linked to commodity pricing and Fertiglobe’s free cash flow performance. Upon completion, ADNOC’s shareholding in Fertiglobe will rise to 86.2%, while the free float traded on the Abu Dhabi Securities Exchange (ADX) will remain at 13.8%.

Strategic Implications for ADNOC and Fertiglobe

This acquisition aligns with ADNOC’s ambitious chemical strategy, as the company seeks to establish a global growth platform for ammonia, a crucial component in the energy transition to lower carbon fuels. For Fertiglobe, this deal supports future growth plans, enabling the company to expand its focus on clean ammonia as an emerging fuel and hydrogen carrier.

The Role of Ammonia in the Energy Transition

Ammonia is increasingly recognized as a key lower carbon fuel and hydrogen carrier. ADNOC’s acquisition of Fertiglobe is a strategic move to position itself at the forefront of this emerging market, leveraging Fertiglobe’s status as the largest nitrogen fertilizer producer in the MENA region and a significant player in sustainable ammonia production.

Ongoing Collaborations and Future Prospects

ADNOC and OCI have also signed a Memorandum of Understanding (MoU) to explore potential cooperation on future growth opportunities for ammonia imports into Europe and product distribution, further strengthening their long-standing strategic partnership.