Koch
Ag & Energy Solutions LLC (KAES) and OCI Global Ltd. announced on Aug. 29 that
they have successfully completed Koch’s acquisition of OCI’s Iowa Fertilizer
Company LLC (IFCo) fertilizer plant in Wever, Iowa, for $3.6 billion.
Announced on Dec. 18, 2023 (GM Dec. 22, 2023), the transaction saw OCI
agreeing to sell 100% of its indirect equity interests in IFCo to KAES
following a strategic review initiated by OCI earlier in 2023. OCI said the
transaction would not require approval of OCI shareholders and the company expected
little regulatory pushback on the sale.
“This acquisition marks another significant investment in the growth of our fertilizer business,” said Mark Luetters, KAES President. “In the past 15 years we have invested $2 billion in our North American production facilities to enhance reliability, expand production, and improve logistics for our customers. This investment enhances our ability to serve customers long-term by providing additional flexibility to adapt to their nitrogen preferences.”
KAES said the IFCo acquisition will add 300 new employees to the Koch Fertilizer team, which operates four nitrogen production facilities in the US and one in Canada, including an extensive terminal network. The company and its affiliates also have partial ownership of three nitrogen facilities in Trinidad and Tobago, as well as a phosphate production facility in Morocco.
“We are excited about the opportunities the Wever facility provides to better serve existing and new customers,” said Scott McGinn, Executive Vice President of Koch Fertilizer. “The plant’s location allows us to extend our product offerings to new customers in the eastern US and provide all customers with expanded products and services.”
Commissioned in 2017 as a large-scale greenfield nitrogen fertilizer facility at a cost of $3 billion, IFCo was the first greenfield nitrogen fertilizer plant built in the US in over 25 years and the largest private construction project in Iowa’s history, adding more than 3,500 jobs during the construction period. The facility has 3.5 million mt/y of production capacity, including 195,000 mt/y of sellable anhydrous ammonia, 1.5 million mt/y of UAN, 420,000 mt/y of urea, and more than 1 million mt/y of diesel exhaust fluid (DEF).
“We are exceptionally proud of OCI and the IFCo operating team’s remarkable achievements in converting a cornfield into a world-class global nitrogen facility and in revitalizing a core industry in the United States,” said OCI CEO Ahmed El Hoshy. “KAES today is opportunely positioned both strategically and geographically to leverage and diversify its extensive platform, and to create significant opportunities to drive the facility’s future growth. We have been impressed by the entire KAES team throughout this process and wish them the best of luck in their onward journey.”
OCI said the closing of the sale marks a strategic milestone for the company, with approximately $9.5 billion in grass cash proceeds generated from the IFCo transaction and the recent sales of Fertiglobe (GM Dec. 15, 2023) and OCI’s Beaumont, Texas, low-carbon ammonia project (GM Aug. 9, p. 1).
“The successful closing of the IFCo transaction is the latest example of OCI’s steadfast commitment to creating value for its shareholders,” said Nassef Sawiris, OCI Executive Chairman. “This milestone further reinforces OCI’s standing and record as a successful developer, operator, and investor. Looking ahead, we will continue to deploy our distinctive knowledge, management expertise, and entrepreneurial spirt into further value-accretive ventures.”