Canada: Fertilizer giants Agrium and Potash in merger talks

Canadian fertilizer giants Agrium Inc. and Potash Corp. of Saskatchewan Inc. said they were in preliminary talks about a possible merger of equals as the industry contends with slumping earnings amid persistently low prices for crop nutrients.

However, the companies also said no decision had been made, and there is no assurance the discussions would result in any potential deal, which would create a company with a total market value of more than $28 billion.

Bloomberg News earlier on Tuesday reported that the fertilizer makers were in advanced merger talks, with a deal announcement possible as soon as next week.

A merger would help Saskatchewan-based Potash, the world’s largest fertilizer producer by capacity, insulate its earnings against volatile moves in crop nutrient prices by giving it access to Agrium’s steadier retail business that sells fertilizer, seeds and other products to farmers.

For the first six months of this year, Agrium’s retail business generated sales of $8.1 billion, down 3.6% from the year-ago period. By comparison, the sales at its smaller wholesale fertilizer operation fell 25% to $1.5 billion over the same period.

Full Content: The Wall Street Journal

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