Agrium and Potash to merge into global fertiliser giant
CANADIAN rivals Agrium Inc and Potash Corp of Saskatchewan have agreed to merge to create a US$36 billion global fertiliser giant in the latest large agribusiness merger sparked by low crop prices.
The new company will combine potash, nitrogen and phosphate production with a global distribution network, employing nearly 20,000 people, and will generate $500 million in annual savings from their combined operations.
The all-stock deal will create the largest crop nutrient company in the world, the companies said.
“The new company will be a low-cost, world-class producer of key crop nutrients including having the lowest-cost potash production assets and reserves in North America,” Agrium chief executive Charles Magro told analysts.
The new company, which has not yet been named, will be based in Saskatoon, Saskatchewan, and be 52 percent owned by Potash shareholders, with Agrium owners holding 48pc. The two companies had combined sales of $20.6 billion in 2015.
The deal must, however, still win shareholder support.
The merger comes as the demand for fertilisers is down sharply in emerging countries like Brazil due to the economic downturn. Both companies also cited weak demand in India and other parts of Asia as a reason for a drop in earnings in the second quarter. –