Fertiglobe Becomes ADNOC’s Platform for Low-Carbon Ammonia Growth Globally

(ADNOC) ADNOC completes acquisition of majority stake in Fertiglobe, increasing its shareholding to 86.2%; Completion marks another milestone in ADNOC’s chemicals growth strategy, the expansion of its low-carbon fuels business, and its plans to become a top five global chemicals player; Fertiglobe, the world’s largest seaborne nitrogen exporter is set to be a global leader in low-carbon ammonia as ADNOC’s consolidated ammonia growth platform; ADNOC intends to integrate its domestic and global portfolio of projects in low-carbon ammonia, more than doubling Fertiglobe’s ammonia project capacity; Management retained in full to quickly launch next phase of growth and value creation with highly talented and experienced team

ADNOC today (October 15, 2024) announced the completion of its acquisition of OCI Global’s 50% + 1 shareholding in Fertiglobe plc (ADX: FERTIGLB), increasing its share in the Company to 86.2%, with 13.8% remaining in free float on the Abu Dhabi Securities Exchange (“ADX”).

Fertiglobe is the world’s largest seaborne exporter of urea and ammonia combined, exporting to 53 countries with a ~10% collective market share of global trade in these products.

The acquisition represents another significant milestone in ADNOC’s ambitious chemicals growth strategy, the expansion of its low-carbon fuels business, and supports its goal to become a top five global chemicals player.

Fertiglobe will become the platform for ADNOC’s growth in fertilizer and low-carbon ammonia. To deliver value accretive and disciplined growth for Fertiglobe, ADNOC will transfer its stakes in existing and future low-carbon ammonia projects to Fertiglobe at cost and when ready for startup, creating a world-class growth platform for low-carbon ammonia as a key energy transition fuel. This includes its two lower carbon ammonia projects in Abu Dhabi and other projects in its global portfolio. On a consolidated basis, the two projects in Abu Dhabi would add ~2 mtpa, more than doubling Fertiglobe’s current merchant ammonia capacity of 1.6 mtpa and increasing its total sellable capacity to 8.6 mtpa of net ammonia and urea combined, in addition to other announced global projects.

His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, said: “ADNOC’s majority shareholding in Fertiglobe marks another milestone in the delivery of our ambitious international chemicals growth strategy and goal to become a top five chemicals player. Fertiglobe is a world-class company, and it will be the vehicle through which ADNOC advances its low-carbon ammonia business, supporting our efforts to enable a just, orderly, and equitable global energy transition. We see significant growth opportunities for Fertiglobe and I am confident that under the continued and dedicated leadership of Ahmed El-Hoshy, the company will deliver greater value for its shareholders.”

Fertiglobe’s current management team will stay in place, reflecting ADNOC’s confidence in their expertise and leadership, including Ahmed El-Hoshy in his continued role as Fertiglobe’s CEO. Ahmed El-Hoshy spent 15 years growing OCI’s US and European business in ammonia and methanol via greenfields, brownfields and acquisitions generating significant value for shareholders by leading recent divestments.

Ahmed El-Hoshy commented: “The successful completion of the ADNOC transaction is a historic milestone for Fertiglobe, reinforcing the positive long-term outlook for our business and unique market position, while elevating our future ambitions. Positioned as the vehicle of ADNOC’s plans to establish a global growth platform for ammonia, Fertiglobe is poised to meet the increasing global demand for low-carbon solutions and bring us closer to a more sustainable future. We look forward to joining ADNOC’s integrated ecosystem and unlocking the full potential of our product portfolio while maximizing shareholder value and maintaining our commitment to balancing disciplined growth with dividend distributions.”

Fertiglobe will continue to grow its low-carbon fuels business following its success in the recent H2Global bid where it secured €397 million of renewable ammonia offtake to Europe at a delivered price of €1,000 per ton until 2033 in a first-of-its kind contract globally. The limited capital expenditure requirements for this project lead to attractive returns for the company.

Robust double-digit IRRs for all future growth projects will be the minimum target for the company as it seeks disciplined and value accretive growth to capitalize on the expected global growth in low-carbon ammonia demand to 24 million tons by 2032, from close to zero now.

Expected market tailwinds from increasing applications for low-carbon ammonia will see demand growth exceed supply growth by an estimated 11 million tons up to 2032, according to industry consultants. ADNOC aims to capture 5% of the global low-carbon hydrogen market by 2030 in support of the UAE’s National Hydrogen Strategy.

Fertiglobe announced that it will share a detailed value creation and growth strategy during its Capital Markets Day in Q1 2025.

Fertiglobe’s management will be hosting a conference call for investors and analysts on October 15, 2024 at 5:00 PM UAE (2:00 PM London, 9:00 AM New York), to present its vision to unlock further growth and value. READ MORE