OCI Global and Orascom Construction Plan Merger

OCI Global and Orascom Construction on Monday said that the two companies were pursuing a potential merger (Combination), to establish a scalable infrastructure and investment platform anchored in Abu Dhabi, with global reach.

Specifically, the merger would offer benefits that will bring together Orascom Construction’s world class execution capabilities supported by a $14 billion backlog, deep industry expertise in infrastructure, and multi-decade delivery of complex projects and concessions primarily in the US, the GCC, Egypt, Europe and select emerging markets, and OCI’s institutional investment platform, transactional expertise, and proven track record of disciplined capital allocation.

It will also unite and enhance the companies’ financial strength, consolidating substantial capital resources and funding capabilities. This strengthened platform will facilitate investment in large-scale infrastructure opportunities through multiple channels, including equity, credit, and operation and maintenance participation, while leveraging Orascom Construction’s established experience in the space.

Together these attributes position the Combination to unlock a new phase of growth, Orascom said in a regulatory disclosure with Abu Dhabi Securities Exchange (ADX) this morning.

The Combination will provide a globally diversified platform from which to leverage Orascom’s long-standing track record and access to an infrastructure opportunities pipeline spanning multiple industries including digital, aviation, transportation, power and water, as well as leadership credentials in delivering landmark projects such as the US data centres, and other notable industrial and infrastructure investments.

Orascom Construction and OCI have each consistently created value across cycles and geographies

spanning five continents, including the execution of landmark infrastructure transactions, industrial projects, and the creation of global businesses.

The periods of greatest value creation in Orascom Construction’s and OCI’s history have been when their businesses were combined — first in cement and later in natural gas-based industries, where the companies build scale and delivered substantial returns. OCI – including Orascom Construction in its predecessor form – has distributed dividends to shareholders of approximately USD 22 billion and delivered an internal rate of return (IRR) of approximately 39% over the period.

Looking ahead, the Combination is poised to contribute to and benefit from the opportunities in infrastructure, and through a fusion of capital, investment and industry expertise, seeks to strengthen and grow a diversified platform that will create recurring value across cycles, for years to come.

Structure of Combination

The two companies are exploring a structure whereby Orascom would be the acquiring ADGM-incorporated and ADX-primary listed entity.

Subject to ongoing negotiations on the structure of the potential merger, OCI shareholders would receive new Orascom Construction shares at a ratio to be determined after completion of reciprocal due diligence and relative valuation. OCI would then subsequently be liquidated and delisted from Euronext Amsterdam.

If a transaction can be agreed and approved by the boards of the two companies, it will be submitted to shareholders of both companies, and for regulatory approvals from the relevant authorities.