Agrium Inc, Potash Corp of Saskatchewan Inc in advanced merger talks: sources – by Ed Hammond, Matthew Monks and Dinesh Nair (Bloomberg News/Financial Post – August 30, 2016)

Potash Corp. of Saskatchewan Inc., the world’s second-largest producer of its namesake fertilizer, and Agrium Inc. are planning to merge, people familiar with the matter said, as the companies battle falling prices and a decline in spending from farmers.

The combination could be announced as soon as next week, the people said, asking not to be identified because the deliberations are private. No final decisions have been made and the Canadian companies could decide against a deal, they said.

Potash has a market capitalization of about US$14.6 billion while Agrium is valued at about US$13.2 billion. Both companies surged 12 per cent in New York trading on Tuesday. Other fertilizer producers, including Intrepid Potash Inc. and CF Industries Holdings Inc., also jumped.

The Investment Industry Regulatory Organization of Canada, or IIROC, has halted trading in shares of both companies. Shares were also halted on the New York Stock Exchange, pending news. Representatives for Agrium and Potash Corp. didn’t immediately respond to requests for comment.

The potential deal comes as fertilizer companies struggle with depressed crop prices, which have pressured spending by farmers. Over the past year, spot potash prices in the U.S. corn belt have fallen 34 per cent and other crop nutrients have also gotten cheaper. Potash buyers in India and China have delayed signing contracts for supplies, damping demand.

For the rest of this article, click here: