Occidental announced to enter into a definitive purchase agreement with Carbon Engineering.
Occidental will acquire all the outstanding equity of Carbon Engineering Ltd. for a total cash consideration of approximately $1.1 billion. The said is to be delivered in three approximately equivalent annual payments. The transaction will close before the end of 2023.
The transaction is subject to Canadian court reviews, Canadian and U.S. regulatory approvals, and other customary closing conditions.
The two companies have worked with each other on direct air capture since 2019.
The acquisition of Carbon Engineering will aid Occidental in availing the 1PointFive subsidiary’s services. This will assist Occidental in rapidly moving DAC technology with discoveries and increase the deployment of DAC. The report says it will be “a large-scale, cost-effective, global carbon removal solution.”
Vicki Hollub, Occidental president and CEO, said, “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,”
“We look forward to continuing our collaboration with the Carbon Engineering team, which has been a leader in pioneering and advancing DAC technology,”
The process to bring DAC to market
After closing, Oxy Low Carbon Ventures will own Carbon Engineering as a subsidiary. The teams of Carbon Engineering, Occidental and 1PointFive will continue to work on DAC technology development. The collected effort is an attempt to bring DAC solutions to market.
Carbon Engineering’s research and development and Innovation Centre remain in Squamish, British Columbia.
Daniel Friedmann, Carbon Engineering CEO, said, “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,”
“At the core of this deeper relationship is the commitment to invest in the development of our technology here in Canada, and the global reach to accelerate implementation of DAC-based climate solutions in the U.S. and around the world.”
1PointFive is a Carbon Capture, Utilization and Sequestration (CCUS) platform.
1PointFive claims to build Stratos, the world biggest DAC plant in Ector County. Stratos will be commercially operational in mid-2025.
