Two of Canada’s fertilizer giants have successfully merged to form the world’s largest nutrient company.
PotashCorp and Agrium have combined to form Nutrien (TSX:NTR,NYSE:NTR), and the company’s shares began trading on January 2, 2018. As of 10:30 a.m. PST, Nutrien’s share price was up $1.70 on the TSX, at $66.15.
“Today we are proud to launch Nutrien, a company that will forge a unique position within the agriculture industry,” said Nutrien President and CEO Chuck Magro.
Nutrien has about 20,000 employees and its investments span 14 countries. The entire enterprise is valued at US$36 billion, and it is the third-largest natural resource company in Canada. Nutrien is also the largest producer of potash in the world and the second-largest producer of nitrogen fertilizer.
“We intend to draw upon the depth of our combined talent and best practices to build a new company that is stronger and better equipped to create value for all our stakeholders, ” Magro added.
The merger of equals saw PotashCorp shareholders receive 0.4 common shares of Nutrien for each common share of PotashCorp they owned, while Agrium shareholders received 2.23 Nutrien common shares for each Agrium common share they owned.
Earlier this year, PotashCorp noted that its shareholders would own approximately 52 percent of Nutrien and Agrium shareholders would own approximately 48 percent. The firms first announced the deal in 2016, but it took time to gain regulatory approval.
PotashCorp and Agrium received final clearance for the combination from the US Federal Trade Commission (FTC) on December 27, 2017. The FTC was concerned that it would negatively impact competition and has said Nutrien must divest two of Agrium’s US facilities and related assets.
Nutrien has agreed to divest Agrium’s Idaho-based superphosphoric acid facility to Itafos (TSXV:IFOS), and will divest its nitric acid facility in Ohio to Trammo. Another crucial piece in the puzzle will be the divestment of PotashCorp’s stake in Chilean lithium producer SQM (NYSE:SQM).
Nutrien’s head office will be in Saskatoon, and it will have a corporate office in Calgary. The company will operate six of Saskatchewan’s 10 potash mines. The merger is expected to save both firms up to US$500 million.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.