Agrium & Potash Corp merge in $38b deal

Agrium & Potash Corp merge in $38b deal

Agricultural companies Potash Corp of Saskatchewan Inc. (TSX:POT) and Agrium Inc. (NYSE:AGU) have announced a US$38 billion merger, to create what will be the world’s largest fertiliser company.

The two companies plan to announce a new name and the merger is expected to be finalised by the middle of 2017.

Existing Potash shareholders will own 52% of the combined company and Agrium shareholders will hold 48%.

Agrium’s CEO Chuck Magro will be the company’s new chief executive officer.

He said: “This is a transformational merger that creates benefits and growth opportunities that neither company could achieve alone. Combining our complementary assets will enable us to serve our customers more efficiently, deliver significant operating synergies and improve our cash flows.”

The two companies expect to build the new firm by ramping up production of potash and nitrogen-based fertiliser, while expanding the scale of their retail network.

The expansion strategy includes new store openings and roll-up acquisitions of competitor retail chains.

BHP Billiton’s (ASX:BHP) bid for Potash Corp in 2010 was declined by the Canadian government and Potash was unable to finalise last year’s proposed acquisition of German rival K+S Group.