CF Industries Holdings, Inc. Agrees to Acquire Ammonia Production Facility with Capacity of 880 KT from Incitec Pivot Limited

CF Industries Holdings, Inc., a leading global manufacturer of hydrogen and nitrogen products, announced that it has signed a formal purchase agreement with Incitec Pivot Limited for IPL's ammonia production facility in Waggaman, Louisiana. The facility has an annual ammonia capacity of 880,000 tons.

The Waggaman ammonia plant and related assets will be purchased by CF Industries for USD 1.675 billion under the terms of the agreement. Around USD 425 million of the purchase price will be allocated to a long-term ammonia offtake deal under which CF Industries would deliver up to 200,000 tonnes of ammonia per year to IPL's Dyno Nobel subsidiary. CF Industries anticipates using cash on hand to fund the remaining USD 1.25 billion of the purchase price.

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Lately, ammonia produced at the Waggaman facility is provided ratably to three customers, including Dyno Nobel, with around 75% utilised in industrial applications.

Based on the nature of the medium- to long-term offtake agreements in place with these customers, CF Industries estimates that the plant will generate gross margin per tonne comparable to its existing ammonia segment prior to synergies, which the Company expects to capture through increased capacity utilisation and operational and logistics optimisation.

Over the previous five years, CF Industries' operational capabilities have resulted in ammonia asset utilisation that is about 10% higher than the average utilisation rate of the Company's North American counterparts.

Furthermore, CF Industries expects accelerating CCS implementation at the facility, boosting its network's low-carbon ammonia production potential, supporting Louisiana's and the country's climate goals, and obtaining 45Q tax credits for sequestered carbon dioxide.

The acquisition has been unanimously authorised by both businesses' boards of directors and is subject to appropriate regulatory clearances and other normal closing conditions.

CF Industries' financial advisor on the transaction is Goldman Sachs & Co. LLC. Skadden, Arps, Slate, Meagher & Flom LLP is its legal counsel.

About the Waggaman Ammonia Production Complex

The Cornerstone Chemical Company-owned ammonia production complex in Waggaman, Louisiana, is located on an integrated chemicals complex.

• Commissioned in October of 2016
• Nameplate capacity: 880,000 tonnes of ammonia per year
• Employees: Approximately 90
• Onsite ammonia storage tank of 38,500 tonnes Capability to load and transfer ammonia via NuStar Pipeline, barge, truck, and rail.
• Situated on the Mississippi River in Jefferson Parish, with prospective vessel loading capabilities for low-carbon ammonia exports.
• The site is 60 miles southeast of CF Industries' Donaldsonville Complex, allowing the complexes to share resources and best practises.

About CF Industries Holdings, Inc.

The objective at CF Industries is to produce clean energy to feed and fuel the globe in a sustainable manner. With the employees focused on safe and dependable operations, environmental stewardship, and disciplined capital and corporate management, they are on track to decarbonise the world's largest ammonia production network, enabling green and blue hydrogen and nitrogen products for energy, fertiliser, emissions abatement, and other industrial activities.

The strategy to leverage their unique capabilities, is helping to accelerate the world's transition to clean energy and is underpinned by their manufacturing complexes in the United States, Canada, and the United Kingdom, an unparalleled storage, transportation, and distribution network in North America, and logistics capabilities enabling a global reach.

As per Procurement Resource, CF Industries Holdings, Inc., a prominent global manufacturer of hydrogen and nitrogen products, announced the signing of a formal acquisition agreement for Incitec Pivot Limited's ammonia manufacturing facility in Waggaman, Louisiana, with Incitec Pivot Limited. The plant has an annual capacity of 880,000 tonnes of ammonia. Under the terms of the agreement, CF Industries would purchase the Waggaman ammonia plant and accompanying assets for USD 1.675 billion.

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A long-term ammonia offtake agreement in which CF Industries would deliver up to 200,000 tonnes of ammonia per year to IPL's Dyno Nobel subsidiary will account for about USD 425 million of the purchase price. CF Industries expects to fund the remaining USD 1.25 billion of the purchase price with cash on hand. Recently, ammonia produced at the Waggaman factory has been rationed to three customers, including Dyno Nobel, with around 75% being used in industrial applications.