OCI Global, global investment platform focused on long-term value creation through disciplined capital allocation, and Orascom Construction, a leading global engineering and construction contractor, have announced that they are pursuing a potential merger. 

 

The combination would establish a scalable infrastructure and investment platform anchored in Abu Dhabi, with global reach.

 

According to a statement, the combination would offer the following benefits:

* Complementary Strengths: The combination 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 United States, the GCC, Egypt, Europe and select emerging markets — and OCI’s institutional investment platform, transactional expertise, and proven track record of disciplined capital allocation.

 

* Strong Balance Sheet: The combination will 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.

 

* Infrastructure Track Record: The combination will provide a globally diversified platform from which to leverage Orascom Construction’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 US data centres, and other notable industrial and infrastructure investments.

 

Track Record of Value Creation

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. Since inception in 1950 by Onsi Sawiris, Orascom Construction has established a strong brand in delivering quality projects and building strong repeated alliances with partners and clients across the world, becoming a leading global Engineering, Procurement and Construction (EPC) player ranked among the world’s top 30 international contractors, and creating a culture that has made the company an employer of choice, attracting and retaining the best talent in a competitive industry. Since 1999, OCI with its entrepreneurial investment has developed a global leading cement, nitrogen, and methanol business, and pioneered the world’s first large-scale greenfield blue ammonia plant in the United States.

 

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 built scale and delivered substantial returns. OCI – including Orascom Construction in its predecessor form – has distributed dividends to shareholders of approximately $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, it said.

 

Structure of the Potential Combination

OCI and Orascom Construction are exploring a structure whereby Orascom Construction would be the acquiring ADGM-incorporated and ADX-primary listed entity. Subject to ongoing negotiations on the structure of the potential combination, 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, it said.  -TradeArabia News Service