Agrium, Potash Corp investors back merger of fertilizer companies – by Nia Williams and Rod Nickel (Reuters Canada – November 3, 2016)

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CALGARY, Alberta/WINNIPEG, Manitoba (Reuters) – Shareholders of Agrium Inc AGU.TO and Potash Corp of Saskatchewan Inc POT.TO overwhelmingly approved an all-stock merger of the fertilizer producers on Thursday, shifting the focus to U.S. and Canadian regulators.

More than 99 percent of Potash investors and 98 percent of Agrium shareholders voted in favor of the deal, the companies said at separate meetings in Saskatoon, Saskatchewan, and Calgary, Alberta, respectively. Reuters reported last month that shareholders were likely to give overwhelming backing for the deal.

The deal required two-thirds’ support of votes cast by each company’s investors to proceed. Crop nutrient producers are struggling with falling prices and profits, as supplies are ample and farm incomes are strained by weaker crop values.

Potash sought to diversify with Agrium’s farm retail network, while Agrium management worked to address investor concerns that the deal exposed them further to low potash prices.

“The expectation (is) the combined entity will have greater leverage and upside participation in a potash price recovery,” said Brad Allen, director of Branav Shareholder Advisory Services, which advises companies on corporate governance issues. “It will take time to validate that optimism, and cost synergy rationales extolled in press releases are often not fully achieved.”

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