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OCI Global, Orascom Construction merger on ice: Dutch-listed fertilizer company OCI Global will remove the proposed merger with EGX- and ADX-listed Orascom Construction from tomorrow's shareholder meeting agenda, following a court ruling from the Amsterdam Enterprise Chamber that effectively blocks the transaction, OCI said in a statement (pdf).
The court sided with minority shareholders, citing conflicts of interest given Nassef Sawiris’ involvement in both companies — and his role in leading negotiations — requiring “vigilance” and the appointment of two independent directors who could decisively vote on the transaction. It also gives credence to their claims that investor protections on the ADX — where Orascom Construction and the merged entity would have been listed — are somehow lower.
It also zeroed in on a standard disclaimer in a Beltone report on the transaction that notes the work wasn’t legally independent research, but for marketing purposes. OCI used the Beltone report to defend the valuation in the transaction.
Most Dutch brokers do not offer access to the Abu Dhabi exchange — and the Dutch court seems to believe opening an ADX brokerage account is akin to being asked to learn how to do particle physics.
Refresher: The merger would have seen OCI shareholders swap their stock for roughly 97.8 mn Orascom Construction shares at an exchange ratio of 0.46 Orascom share for each OCI share, based on equity values of USD 1.52 bn for Orascom and USD 1.35 bn for OCI. The board formally approved issuing 97.2 mn new Orascom shares at a USD 12.79 premium, with the remaining 561.8k shares coming from OCI’s existing stake in the company.
Not everything was blocked: The ruling does not apply to the sale of OCI Ammonia Holding.
Why this all matters
The move sought to combine the two Nassef Sawiris-backed firms into a single Abu Dhabi-based infrastructure and investment platform. The combined group would have started with a liquidity position that could surpass USD 1.5 bn, giving it substantial room to scale its infrastructure strategy, according to a CI Capital note seen by EnterpriseAM.
What’s next: The Sawiris family must either revise the offer to satisfy the new directors or abandon the transaction entirely and pursue asset liquidation.
