Agrium, PotashCorp get Chinese OK for mega-deal
Approval conditional on sale of three companies; American blessing in works
A proposed merger between the world’s largest fertilizer company and a massive agricultural product distributor has received conditional approval from Chinese anti-trust authorities.
It now only needs the blessing of the U.S. government to proceed.
Potash Corp. of Saskatchewan Inc. and Agrium Inc. said Tuesday that China’s Ministry of Commerce approved the US$26-billion merger, conditional on the Saskatoon-based firm divesting holdings in three companies valued at a total of around US$4 billion.
Those companies — Saudi Arabia-based Arab Potash Company (APC), Israel Chemicals, Ltd. and Sociedad Quimica y Minera de Chile S.A. (SCM) — are the same ones India’s government said PotashCorp needed to sell its stakes in before the agreement could proceed.
PotashCorp and Agrium, which is headquartered in Calgary, said the approval is also conditional on PotashCorp converting its equity interest in Sinofert Holdings Ltd. to a passive investment, and ensuring its international distributor, Canpotex, is committed to China.
The merger has already been approved by Canadian, Russian, Indian and Brazilian authorities. The companies said Tuesday the U.S. approval process is ongoing and the deal is expected to close before the end of 2017.
Agrium also said it has agreed to sell two American assets — a phosphate production plant in Conda, Idaho and a nitric acid facility in North Bend, Ohio — to help win U.S. Federal Trade Commission approval of the deal.
If approved, the merger would create Nutrien Ltd. — a company with around 20,000 employees, operations in 18 countries, six of Saskatchewan’s 10 operating potash mines and corporate offices in Saskatoon and Calgary.
The deal has come under attack from Saskatchewan Premier Brad Wall, who has said he will not rule out using legislation or the province’s potash royalty regime to maximize the number of head office jobs in Saskatchewan.