CF Industries Holdings Inc. on Dec. 1 announced that it has closed its acquisition of Incitec Pivot Ltd.’s 880,000 st/y ammonia production complex located in Waggaman, La. As previously reported, the deal was expected to close Dec. 1 after receiving antitrust approval (GM Nov. 17, p. 1).
CF purchased the Waggaman plant and related assets for $1.675 billion, subject to adjustments. The companies allocated approximately $425 million of the purchase price to a long-term ammonia offtake agreement under which CF will supply up to 200,000 st/y of ammonia to IPL’s Dyno Nobel subsidiary at production economics. CF funded the remaining purchase price with cash on hand.
“We are pleased to grow our industry-leading ammonia production capabilities with the addition of IPL’s Waggaman ammonia production facility and team,” said Tony Will, CF President and CEO. “This transaction deploys our capital efficiently, delivering immediate profitable growth by adding one of the newest ammonia production units in North America into our existing network while advancing our long-term strategic focus on low-carbon ammonia as a clean energy source.”
Along with its offtake agreement with IPL, CF said it will continue to fulfill medium- and long-term offtake agreements with two customers that were in-place prior to the acquisition. CF estimates that these agreements will generate gross margin per ton commensurate with its existing ammonia segment prior to the greater capacity utilization and operational and logistics optimization CF expects to achieve with the site’s integration into the company.
Additionally, CF anticipates implementing carbon capture and sequestration (CCS) technologies at the site on an accelerated timeline, increasing its network’s low-carbon ammonia production capability while earning 45Q tax credits for sequestered carbon dioxide.