Industries Qatar has taken full ownership of Qatar Fertiliser Company (QAFCO), a fertilizer producer, by acquiring the remaining 25% from its joint venture partner Qatar Petroleum (QP) for $1 billion.

Established in 1969, QAFCO produces 5.7 to 5.8 million metric tons per year of urea and around 3.8 million metric tons ammonia. Currently, the fertilizer producer holds a 70% stake in Gulf Formaldehyde and a 60% stake in Qatar Melamine.

According to Industries Qatar, the transaction is in line with its strategy to consolidate its footprint and generate value across the downstream sector. The deal, in particular, is said to boost the shareholder value by transforming Industries Qatar into a 100% owner of the largest single-site urea producer in the world and expanding its presemce in a well-established fertilizer business.

As part of the deal, QAFCO has signed a new gas sale and purchase agreement with Qatar Petroleum with effect from 1 August 2020 until 31 December 2035, covering the gas requirements of its trains 1-6 and Qatar Melamine Company (QMC).

Also, part of the same transaction, Industries Qatar’s board of directors has given its consent to QAFCO’s acquisition of Qatar Petroleum’s 40% stake in Qatar Melamine Company, which will come into effect from 1 July 2020.

Industries Qatar said that by being the full owner of QAFCO, it will get complete control over the company, which would give it the ability to appoint all members of its board of directors, and independently take investing, financing, and dividend decisions.

  Industries Qatar, QAFCO, Qatar, Qatar Fertiliser Company, Qatar Petroleum