Occidental to Acquire Carbon Engineering for $1.1 Billion
US oil and gas producer Occidental Petroleum has agreed to acquire Canadian climate solutions company Carbon Engineering for $1.1 billion, a developer of technology for large-scale direct air capture (DAC).
The transaction is expected to close before the end of 2023, subject to Canadian court reviews, Canadian and US regulatory approvals and other customary closing conditions. The payments will be made in three approximately equivalent annual instalments, with the first due at closing.
Occidental has been working with Carbon Engineering on DAC deployment since 2019. Occidentel said that acquiring Carbon Engineering aligns with its integrated net-zero strategy and provides the opportunity to rapidly advance DAC technology breakthroughs and accelerate deployment of DAC as a large-scale, cost effective, global carbon removal solution.
“We expect the acquisition of Carbon Engineering to deliver our shareholders value through an improved drive for technology innovation and accelerated DAC cost reductions. The technology partnership also adds new revenue streams in the form of technology licensing and royalties. Importantly, the acquisition enables Occidental to catalyze broader development partnerships for DAC deployment in the most capital efficient and valuable way,” commented Occidental president and CEO Vicki Hollub.
“We have always believed that global partnerships and cross-industry collaboration would be required to deploy DAC infrastructure at the scale required to make a climate-relevant impact. Carbon Engineering and Occidental have been working increasingly close together for the past five years to address the CO2 problem, making Occidental a trusted and committed partner for this next chapter in Carbon Engineering’s journey,” added Daniel Friedmann, CEO of Carbon Engineering.
Upon closing of the deal, Carbon Engineering will become a wholly owned subsidiary of Oxy Low Carbon Ventures. Its research and development activities and Innovation Center will remain in Squamish, British Columbia.
