Yara to sell European CO2 business to Praxair
Yara International has signed a deal to sell its European CO2 business to Praxair for €218m.
The transaction also includes Yara's remaining 34% stake in the Yara Praxair Holding industrial gas joint-venture in Scandinavia for around €94m.
Under the deal, Yara will supply Praxair with raw CO2 gas and continue to operate three CO2 liquefaction units that are located within its fertiliser plants.
Yara's European CO2 business operates five CO2 liquefaction plants, three CO2 shipping vessels, seven shipping terminals, and six dry ice production facilities across the UK, Ireland, Scandinavia, Northern Europe, and Italy.
Last year, the business sold around 850,000t of liquid CO2 and 50,000t of dry ice to the food and beverage industries, and recorded sales of €112m.
Yara president and CEO Svein Tore Holsether said: "The CO2 business has been an attractive and long-standing part of Yara's portfolio, but remains a relatively small part of the broader industrial gas industry, and where Praxair is well positioned to create additional value."
Formed in 2007, Yara Praxair Holding recorded sales of €145m with earnings before interest, tax, depreciation and amortisation (EBITDA) of €35m in 2014.
Subject to regulatory approvals and other customary closing conditions, the transaction is expected to be completed in the first quarter of 2016.
Yara expects the deal to offer a provisionally estimated post-tax gain of €150m.
Praxair chairman and CEO Steve Angel said: "Praxair is committed to growth, and this proposed acquisition aligns with our core business strategy of building density in targeted geographies where we can achieve synergies.
"Additionally, this business will be a positive addition to our portfolio by enhancing our presence in non-cyclical segments such as food and beverages."
Earlier this year, Praxair signed a 20-year agreement to supply 170 million standard cubic feet per day of hydrogen and 2,000t per day of nitrogen to Yara's ammonia joint-venture with BASF in Freeport, Texas, US.
Image: Yara's CO2 production plant in Sluiskil, Netherlands. Photo: courtesy of Dag Sunnan? / Yara International ASA.