Canada-based Methanex has signed a $2.05 billion agreement for OCI Global’s methanol business, which includes OCI’s stake in two methanol production facilities in Beaumont, Texas.

Methanex expects to achieve $30 million annually in cost synergies through the deal. Under the agreement, the purchase includes $1.15 billion in cash, an issuance of 9.9 million Methanex common shares to OCI valued at $450 million and the assumption of $450 million in debt and leases, according to a press release from Methanex.

Methanex expects a multiple EBITDA of 7.5.

According to a separate statement, OCI will become the second-largest Methanex shareholder, with about 13% of the company.

OCI is a Dutch company that has been selling assets to reduce debt and focus on more climate-friendly products, such as low-carbon ammonia, according to a report from Reuters.

The transaction is expected to close in the first half of 2025. Methanex’s financial advisors were Deutsche Bank and RBC Capital Markets. McCarthy Tétrault LLP, Baker McKenzie LLP, Loyens & Loeff NV and Reed Smith LLP acted as legal counsel for Methanex.

Methanol is a key component in the chemical and pharmaceutical industries, and the majority of its production worldwide is accomplished through processing natural gas, according to the U.S. Department of Energy.

The deal includes whole ownership of a methanol production facility, plus 50% ownership of another, both located in Beaumont. Combined, the facilities will provide Methanex 1.76 MMmt/y of methanol.

“This is a unique opportunity to create value by acquiring two highly attractive North American methanol assets that will further strengthen our global production base, and we expect it will be immediately accretive to free cash flow per share,” said Rich Sumner, president and CEO of Methanex.

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