Sawiris-backed Orascom Construction and OCI Global tee up a cross-border merger: Orascom Construction and OCI Global — both backed by Egyptian bn’aire Nassef Sawiris — are exploring a potential merger that would combine the Cairo-born contractor and the Dutch-listed fertilizer player to create a single global infrastructure and investment platform based out of and listed in Abu Dhabi, according to a joint statement (pdf). Sawiris flagged in in February 2024 that he was weighing a full overhaul of OCI.

The pitch: The idea is to bring together Orascom Construction’s USD 14 bn backlog of projects and strong track record in execution with OCI’s expertise in managing investments and allocating capital. Together, they’d have the balance-sheet muscle to take on major infrastructure projects — to be financed through equity and credit. The partnership would target sectors ranging from digital and aviation to power, water, and transport, with projects spanning the US, Egypt, the GCC, and Europe.

The proposal would see ADX- and EGX-listed Orascom Construction absorb OCI Global, which will, in turn, liquidate and delist from Euronext Amsterdam. Sawiris owns 38.8% of OCI Global as of August 2024 and 42.4% of Orascom as of January. A KPMG audit found that OCI and Orascom together have generated more than USD 22 bn in dividends since 1999, delivering a 39% IRR across cycles.

Transaction mechanism: Under the agreement, OCI shareholders will swap their stock for newly-issued shares in Orascom Construction at a ratio that will be decided after the parties wrap up due diligence and agree on fair value. The move is still subject to board and shareholder, and regulatory approvals.

What Sawiris said: Sawiris framed the merger as a way to pivot from fertilizers and chemicals toward global infrastructure, leveraging Orascom’s project-delivery record and the more than USD 1 bn in proceeds sitting on OCI’s balance sheet. “We want to focus the next stage of our business on the area we see the biggest opportunity, which is infrastructure,” Sawiris told the Financial Times. Meanwhile, the bn’aire said he plans to invest as much as USD 50 bn in US infrastructure, with data centers among the key targets.

OCI Global has been paring back its industrial portfolio through a string of high-profile divestments. Last year, it sold its controlling stake in Fertiglobe, its JV with Adnoc, to the Abu Dhabi energy giant for USD 3.62 bn shortly after offloading its wholly-owned subsidiary Iowa Fertilizer Company to Koch Ag & Energy Solutions for USD 3.6 bn. Last year also saw Australia’s Woodside Energy struck a USD 2.35 bn agreement to acquire OCI’s blue ammonia project in Texas. In addition, OCI announced the sale of its methanol business in the US and Europe to Methanex in a USD 2.1 bn transaction in September 2024.

Market reax: Shares of Orascom Construction rose 3.8% on the ADX to close at AED 35.0 and fell 1.6% on the EGX to EGP 438.80 yesterday.

ICYMI- Orascom Construction made its ADX debut this month, transferring from Nasdaq Dubai. The contractor is the first Egyptian company to pursue a dual listing in Abu Dhabi and Cairo highlighting the ADX’s rising appeal as a regional liquidity hub and giving Orascom access to deeper institutional liquidity.

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