CF and OCI’s European, North American and Global Distribution
Businesses to Become Subsidiaries of New Holding Company Tax Resident in
CF Industries Holdings, Inc. (NYSE:CF) and OCI N.V. (Euronext:OCI)
announced today that they have amended the combination agreement
originally announced on August 6, 2015. Under the amended agreement, the
jurisdiction of incorporation and tax residency of the new holding
company has been changed from the United Kingdom to the Netherlands.
The amended agreement has been unanimously approved by the boards of
directors of both companies.
“The industrial logic and strategic rationale of the combination remains
very attractive, with expected operational and structural synergies
essentially unchanged from those previously announced,” said Tony Will,
president and chief executive officer, CF Industries Holdings, Inc.
The anticipated timing to close the transaction remains mid-2016. The
proposed transaction remains subject to approval by the shareholders of
CF and OCI, as well as customary closing conditions and certain other
regulatory approvals. Antitrust approvals and clearances obtained to
date include approval from the European Commission on December 4, 2015;
the expiration of the waiting period mandated for United States
government antitrust review on November 2, 2015; and unconditional
approval from the Turkish Competition Authority received on October 6,
2015. The companies will continue to pursue all required regulatory
For additional information on the amended agreement, please see the
question-and-answer document accompanying this news release.
CF Industries Holdings, Inc. will be posting a presentation regarding
today’s announcement to the investor portion of the company’s website at www.cfindustries.com
and hosting a conference call at 11:00 am Eastern on Monday, December
21, 2015, to provide an update on the transaction and answer analysts’
Investors can access the call by dialing 866-748-8653 or 678-825-8234.
The passcode is 14041371. The conference call also will be available
live on the company’s website at www.cfindustries.com.
Participants also may pre-register for the webcast on the company’s
website. Please log-in or dial-in at least 10 minutes prior to the start
time to ensure a connection. A replay of the call will be available for
seven days by calling (855) 859-2056 and citing code 14041371.
CF Industries-OCI Combination Frequently Asked
What are the next steps for approval of the proposed combination
An amended registration statement on Form S-4 will
be filed with the SEC. Once filed, it will be available through the
SEC’s website at www.sec.gov
under the company name “CF B.V.” The company will also continue to
pursue additional regulatory approvals not yet obtained. The amended
agreement should not affect the anticipated timing for transaction
closing, which is currently expected by mid-2016.
Does the new structure satisfy the notice issued by The Treasury
By being tax resident in the Netherlands, where OCI
and the OCI subsidiaries being acquired in the transaction are
incorporated, are tax resident, and conduct meaningful operations, the
new holding company would satisfy the requirements of the U.S.
Department of the Treasury’s notice issued on November 19, 2015.
What is the impact on the expected synergies from the difference
between the Netherlands corporate tax rate and the UK corporate tax rate?
the Netherlands and the United Kingdom have territorial corporate tax
systems. As such, they do not generally tax income earned outside of
their jurisdiction, nor do they generally tax dividends received from
non-Dutch subsidiaries. The 25 percent Dutch statutory tax rate
generally only applies to income earned by Dutch operations. This tax
rate always applied to the combined company’s Dutch operations.
Therefore, the change in tax residency should have no meaningful impact
on the synergies expected from this combination.
Can you break out the synergies between operational and tax and give
a few examples?
We expect to generate significant operational
and structural synergies, and our estimate of approximately $500 million
in after-tax run-rate synergies has not changed. Operational synergies
include: leveraging the CF distribution network with Wever, Iowa,
production volumes, creating logistical efficiencies and cost savings;
reducing transportation costs and increasing options for Beaumont,
Texas, ammonia production; reducing costs and optimizing product mix
offerings for our customers in the United Kingdom and in Europe through
coordination between the Geleen, Netherlands, facility and our UK
facilities; being able to more efficiently serve the global market from
our enhanced production footprint; and elimination of overlapping
corporate functions; among many others. Structural synergies include:
optimization of our corporate capital structure and elimination of
double taxation on non-US-based earnings; among others.
Is the proposed Natgasoline facility still part of the combination
agreement and if so will the additional conditions to including 45% of
Natgasoline in the transaction remain the same?
The terms of
the combination agreement with respect to Natgasoline have not changed.
Will this change the timing of the close of the strategic venture
The CHS deal is scheduled to close on February 1,
2016, as previously communicated. The CHS and OCI deals are not
contingent upon one another.
About CF Industries Holdings, Inc.
CF Industries Holdings, Inc., headquartered in Deerfield, Illinois,
through its subsidiaries is a global leader in the manufacturing and
distribution of nitrogen products, serving both agricultural and
industrial customers. CF Industries operates world-class nitrogen
manufacturing complexes in Canada, the United Kingdom and the United
States, and distributes plant nutrients through a system of terminals,
warehouses, and associated transportation equipment located primarily in
the Midwestern United States. The company also owns a 50 percent
interest in an ammonia facility in The Republic of Trinidad and Tobago.
CF Industries routinely posts investor announcements and additional
information on the company’s website at www.cfindustries.com
and encourages those interested in the company to check there frequently.
About OCI N.V.
OCI N.V. is a global producer and distributor of natural gas-based
fertilizers and industrial chemicals based in the Netherlands. The
company produces nitrogen fertilizers, methanol and other natural gas
based products, serving agricultural and industrial customers from the
Americas to Asia. The company ranks among the world’s largest nitrogen
fertilizer producers, and can produce more than 8.4 million metric tons
of nitrogen fertilizers and industrial chemicals at production
facilities in the Netherlands, the United States, Egypt and Algeria. OCI
N.V. is listed on the Euronext in Amsterdam.
Safe Harbor Statement
All statements in this communication by CF Industries Holdings, Inc.
(together with its subsidiaries, the "Company"), other than those
relating to historical facts, are forward-looking statements.
Forward-looking statements can generally be identified by their use of
terms such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict" "project" and similar terms and
phrases, including references to assumptions. Forward-looking statements
are not guarantees of future performance and are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
Company's control, which could cause actual results to differ materially
from such statements. These statements may include, but are not limited
to, statements about the benefits, expected timing of closing and other
aspects of the proposed acquisition (the "OCI Transaction") by the
Company from OCI N.V. ("OCI") of OCI's European, North American and
global distribution businesses (the "ENA Business") and the proposed
strategic venture (the "CHS Strategic Venture") with CHS Inc. ("CHS");
statements about future strategic plans; and statements about future
financial and operating results.
Important factors that could cause actual results to differ materially
from those in the forward-looking statements include, among others,
risks and uncertainties arising from the possibility that the CHS
Strategic Venture as contemplated may be delayed or may not take effect
at all; difficulties associated with the operation or management of the
CHS Strategic Venture; risks and uncertainties relating to the market
prices of the fertilizer products that are the subject of the supply
agreement over the life of the supply agreement and risks that
disruptions from the CHS Strategic Venture as contemplated will harm the
Company's other business relationships; the volatility of natural gas
prices in North America and Europe; the cyclical nature of the Company's
business and the agricultural sector; the global commodity nature of the
Company's fertilizer products, the impact of global supply and demand on
the Company's selling prices, and the intense global competition from
other fertilizer producers; conditions in the U.S. and European
agricultural industry; difficulties in securing the supply and delivery
of raw materials, increases in their costs or delays or interruptions in
their delivery; reliance on third party providers of transportation
services and equipment; the significant risks and hazards involved in
producing and handling the Company's products against which the Company
may not be fully insured; risks associated with cyber security; weather
conditions; the Company's ability to complete its production capacity
expansion projects on schedule as planned, on budget or at all; risks
associated with expansions of the Company's business, including
unanticipated adverse consequences and the significant resources that
could be required; potential liabilities and expenditures related to
environmental, health and safety laws and regulations and permitting
requirements; future regulatory restrictions and requirements related to
greenhouse gas emissions; the seasonality of the fertilizer business;
the impact of changing market conditions on the Company's forward sales
programs; risks involving derivatives and the effectiveness of the
Company's risk measurement and hedging activities; the Company's
reliance on a limited number of key facilities; risks associated with
the Company's Point Lisas Nitrogen Limited joint venture; acts of
terrorism and regulations to combat terrorism; risks associated with
international operations; losses on the Company's investments in
securities; deterioration of global market and economic conditions; and
the Company's ability to manage its indebtedness.
Other important factors, relating to the OCI Transaction, that could
cause actual results to differ materially from those in the
forward-looking statements include, among others: the risk that the OCI
Transaction is not accorded the tax and accounting treatment anticipated
by the Company; the effect of future regulatory or legislative actions
on the new holding company ("New CF"), the Company and the ENA Business;
risks and uncertainties relating to the ability to obtain the requisite
approvals of stockholders of the Company and OCI with respect to the OCI
Transaction; the risk that governmental or regulatory actions delay the
OCI Transaction or result in the imposition of conditions that could
reduce the anticipated benefits from the OCI Transaction or cause the
parties to abandon the OCI Transaction; the risk that a condition to
closing of the OCI Transaction may not be satisfied; the length of time
necessary to consummate the OCI Transaction; the risk that the Company
and the ENA Business are subject to business uncertainties and
contractual restrictions while the OCI Transaction is pending (including
the risk that the Company is limited from engaging in alternative
transactions and could be required in certain circumstances to pay a
termination fee); the risk that the OCI Transaction or the prospect of
the OCI Transaction disrupts or makes it more difficult to maintain
existing relationships or impedes establishment of new relationships
with customers, employees or suppliers; diversion of management time on
transaction-related issues; the risk that New CF, the Company and the
ENA Business are unable to retain and hire key personnel; the risk that
closing conditions related to the Natgasoline joint venture may not be
satisfied; the risk that the Company, New CF and the ENA Business will
incur costs related to the OCI Transaction that exceed expectations; the
risk that the businesses of the Company and the ENA Business will not be
integrated successfully; the risk that the cost savings and any other
synergies from the OCI Transaction may not be fully realized or may take
longer to realize than expected; the risk that access to financing,
including for refinancing of indebtedness of the ENA Business or the
Company, may not be available on a timely basis and on reasonable terms;
unanticipated costs or liabilities associated with the OCI
Transaction-related financing; the risk that the credit ratings of New
CF and the Company, including such ratings taking into account the OCI
Transaction and related financing, may differ from the Company's
expectations; risks associated with New CF's management of new
operations and geographic markets; and the risk that the ENA Business is
unable to complete its current production capacity development and
improvement projects on schedule as planned, on budget or at all.
More detailed information about factors that may affect the Company's
performance and could cause actual results to differ materially from
those in any forward-looking statements may be found in CF Industries
Holdings, Inc.'s filings with the Securities and Exchange Commission
(the "SEC"), including CF Industries Holdings, Inc.'s most recent
periodic report filed on Form 10-Q, which is available in the Investor
Relations section of the Company's web site. Forward-looking statements
are given only as of the date of this communication and the Company
disclaims any obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or an
invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to or
in connection with the proposed transaction or otherwise, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended, and otherwise
in accordance with applicable law.
The new holding company ("New CF") for the combination of CF Industries
Holdings, Inc. ("CF Industries") and the European, North American and
global distribution businesses of OCI N.V. ("OCI") will file with the
SEC an amended registration statement on Form S-4 (SEC File No.
333-207847) that will include a preliminary proxy statement of CF
Industries and a preliminary shareholders circular of OCI, each of which
will also constitute a preliminary prospectus of New CF. The
registration statement has not been declared effective by the SEC. The
definitive proxy statement/prospectus will be delivered to CF Industries
shareholders and the definitive shareholders circular/prospectus will be
delivered to OCI shareholders as required by applicable law after the
registration statement becomes effective. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, THE SHAREHOLDERS
CIRCULAR/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED
WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders will be
able to obtain free copies of the proxy statement/prospectus, the
shareholders circular and other documents filed with the SEC by New CF
and CF Industries through the website maintained by the SEC at www.sec.gov.
In addition, investors and security holders will be able to obtain free
copies of the proxy statement/prospectus, the shareholders circular and
other documents filed by CF Industries and New CF with the SEC by
contacting CF Industries Investor Relations at: CF Industries Holdings,
Inc., c/o Corporate Communications, 4 Parkway North, Suite 400,
Deerfield, Illinois, 60015 or by calling (847) 405-2542.
Participants in the Solicitation
CF Industries and New CF and their respective directors and executive
officers and OCI and its executive directors and non-executive directors
may be deemed to be participants in the solicitation of proxies from the
stockholders of CF Industries in connection with the proposed
transaction. Information regarding the directors and executive officers
of CF Industries is contained in CF Industries' proxy statement for its
2015 annual meeting of stockholders, filed with the SEC on April 2,
2015, and CF Industries' Current Report on Form 8-K filed with the SEC
on June 25, 2015. Information about the executive directors and
non-executive directors of OCI is contained in OCI's annual report for
the year ended December 31, 2014, available on OCI's web site at www.oci.nl.
Other information regarding the persons who may, under the rules of the
SEC, be deemed participants in the solicitation of the stockholders of
CF Industries in connection with the proposed transaction, including a
description of their direct or indirect interests, by security holdings
or otherwise, is set forth in the preliminary proxy statement/prospectus
included in the registration statement on Form S-4 filed by Darwin
Holdings Limited on November 6, 2015 (SEC File No. 333-207847).
View source version on businesswire.com: http://www.businesswire.com/news/home/20151220005059/en/
Copyright Business Wire 2015