What's going on in the agricultural supply world?
Canadian fertilizer maker Agrium Inc. (TSX and NYSE: AGU) made an unsolicited
$3.6 billion cash and stock bid to acquire CF Industries Holdings Inc. (NYSE: CF). Meanwhile, on Monday, CF Industries
went hostile in its $2.1 billion bid for Sioux City, Iowa-based Terra Industries Inc. Agrium would like CF to drop the Terra bid.
Agrium, the
largest retailer to U.S. farmers, wants to acquire Deerfield, Ill.-based CF at $72 per share, a 30% premium over CF's closing price on Feb. 24. Agrium also noted it has sufficient cash resources and committed financing underwritten by Royal Bank of Canada and The Bank of Nova Scotia to fund the cash portion of the proposal.
Agrium President and CEO Mike Wilson said in a statement, "We will have combined revenues of nearly $14 billion and become a global leader in nutrient production and distribution. The acquisition would also triple our phosphate and UAN capacity." An analyst told Bloomberg the deal would boost Agrium's share of U.S. farm retail to more than 20% from 15%.
In its press release, Agrium said it expects to realize annual operating synergies of about $150 million from the combination within three years of closing. CF stockholders will hold 24% of the combined company.
As for Terra Industries, it rejected CF's offer as too low. But CF vowed to persist, saying: "We are going forward with our proxy contest to replace three of your directors at the upcoming annual meeting." Each share of Terra common stock would be exchanged for .4235 shares of CF Industries common stock. Under Maryland law they cannot close a transaction without approval from the Terra board.
Terra is a producer of nitrogen fertilizer, crop protection products, seed and services for farmers. -
Baz HiralalGo to the story
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