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The European Commission has approved the Abu Dhabi National Oil Company (Adnoc)’s acquisition of Netherlands-based OCI Global’s stake in Fertiglobe, according to a European Commission (EC) statement last week. Chemical producer OCI Global previously held a 50% +1 stake in their joint venture Fertiglobe for AED 13.28 bn (c.USD 3.62 bn).
Background: The two companies signed a binding agreement to offload OCI’s 51% stake in Fertiglobe in December. Adnoc’s shares in Fertiglobe were said to have increased to 86.2% at the time, with the remaining in freefloat on the Abu Dhabi Securities Exchange. Fetiglobe shares were priced at an 8% premium at AED 3.20 (c.USD 0.87) per share, OCI said in December.
What Adnoc stands to gain: The acquisition aims to boost the production and distribution of nitrogen fertilizers by Fetiglobe, according to the EC statement. Adnoc’s acquisition of OCI’s stakes is part of a company drive to expand its global ammonia production network, in efforts to grow a platform for the low-carbon fuel which also serves a (green) hydrogen carrier.
Fertiglobe is positioning itself as a major ammonia player: Fertiglobe sent the world’s first ISCC PLUS-certified (International Sustainability and Carbon Certification) green ammonia shipment to India from its electrolyzer facility in Egypt’s Suez Canal Economic Zone in December. Fertiglobe, alongside Adnoc-ADQ JV Ta’ziz, GS Energy, and Mitsui, has also signed a shareholder agreement to construct a facility to produce some 1 mn tons of low-carbon ammonia annually in the UAE. The company is currently studying another green hydrogen project in the UAE in collaboration with Masdar and Engie.
Not the first — or last — partnership between Adnoc and OCI: Both sides inked an MoU to explore importing and distributing ammonia in the EU in December. The agreement will see the two explore joint investments in decarbonization and product distribution projects in North America and Europe. OCI is also considering offering its US crop nutrient unit Iowa Fertilizers to Adnoc for more than USD 3 bn.
IN OTHER ADNOC NEWS-
Adnoc had its eyes on BP for LNG portfolio, but has reportedly backed out: Adnoc reportedly entered discussions to acquire a “big stake” in multinational oil and gas company BP in a bid to up its liquefied natural gas (LNG) portfolio, Reuters reports, citing people familiar with the matter. Talks “didn’t go far,” after the Emirati oil giant weighed political considerations and decided that BP would not be the right fit for its strategy, the sources added. Adnoc also looked at other international companies for wider LNG access, with no further information disclosed.
The rationale for a no to BP? UK governments have in the past told BP that they would block any takeover attempts by foreign entities, owing to the company’s strategic value at GBP 88 bn, Reuters adds, citing people familiar with the matter. The potential government intervention might have swayed Adnoc’s decision on the transaction — especially after the British government recently objected to a UAE-led takeover of British newspaper The Telegraph.
Background: Adnoc has doubled down on its efforts to increase oil and gas production capacity, recently earmarking USD 13 bn over the next five years to expand in domestic and international markets. The company plans to double its LNG production capacity by 2028, and grow its global presence by “acquiring new positions in the gas value chain, targeting opportunities in Europe, India, China and South-East Asia.” Adnoc is reportedly seeking to submit a bid higher than EUR 11.3 bn to acquire German polymer materials manufacturer Covestro.
