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Potash/Phosphate

Vale fertilizer deal on track despite BNDES delay -sources – by Tatiana Bautzer and Guillermo Parra-Bernal (Reuters U.S. – October 5, 2016)

http://www.reuters.com/

RIO DE JANEIRO – Oct 5 Vale SA’s plan to dispose of fertilizer assets remains on track despite a request last week by Brazil’s state development bank, BNDES, to analyze the transaction more carefully, according to two people with direct knowledge of the situation.

Terms of the deal, which involves the sale of certain assets to U.S.-based Mosaic Co, are unlikely to change significantly, one of the sources said on Wednesday, requesting anonymity to speak freely about the issue.

BNDES pushed back the vote on the fertilizer deal at a Vale board meeting last Thursday, the first person familiar with the situation said. O Globo columnist Lauro Jardim, without saying how the newspaper obtained the information, reported that day that BNDES had delayed the voting on the transaction to Oct. 20.

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Mosaic’s Radioactive Sinkhole Problem Could Mean Mine Delays – by Jen Skerritt (Bloomberg News – September 27, 2016)

http://www.bloomberg.com/

As the world’s largest producer of phosphate fertilizer, Mosaic Co. is used to digging up parts of Florida to recover the mineral. But lately, one particular hole is causing the company some headaches.

A sinkhole 45 feet (14 meters) wide has opened up in a pile of mining waste at the company’s New Wales site in Polk County, about 30 miles east of downtown Tampa, swallowing about 215 million gallons of radioactive wastewater — enough to fill about 326 Olympic-sized swimming pools. Mosaic says it believes the sinkhole has reached the Floridan aquifer, which provides the local community’s water supply.

While Mosaic first noticed the problem in late August, it didn’t make a public announcement until Sept. 15. Three local residents are now suing the company, alleging improper storage of chemical waste. The spill could mean increased hurdles for Mosaic’s expansion plans in Florida, according to Jonas Oxgaard, a New York-based analyst at Sanford C. Bernstein & Co.

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Name game: Potash merger offers much-needed rebranding opportunity – by Susan Krashinsky (Globe and Mail – September 27, 2016)

http://www.theglobeandmail.com/

The proposed $36-billion (U.S.) mega-merger of Potash Corp. of Saskatchewan Inc. and Agrium Inc. is a bid to create a Canadian giant in the fertilizer market. It is also a union of two thoroughly boring brands.

One is literally named for the thing it sells and the location of its headquarters. The other is slightly more creative – named for a reference to agriculture with the “ium” suffix meant to symbolize “a close connection to the earth.” A key decision in the merger is still unknown: What will the new company be called?

“Agrium and PotashCorp are aware that naming the new company is one of the most important marketing activities that they will undertake. They intend to take their time to do it right and will provide an update on this in due course,” the companies said in an e-mailed statement.

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Tough farm conditions right time for Potash merger: Agrium CEO – by Rod Nickel (Reuters Canada – September 20, 2016)

http://ca.reuters.com/

Reuters) – Plunging crop and fertilizer prices may not have hit rock bottom yet, and the market’s weakness makes it the right time to merge leading farm input suppliers, the chief executive officer of Agrium Inc said on Tuesday, making his pitch to skeptical investors for a $26 billion union with Potash Corp of Saskatchewan Inc.

“Are we at the bottom yet? We don’t know. We know there’s more upside than downside,” said Agrium CEO Chuck Magro, adding that fertilizer demand is growing. “This is the time in the cycle where it makes sense to do mergers and acquisitions.”

The all-stock deal would combine Potash’s crop nutrient production capacity, the world’s largest, with Agrium’s farm retail network, North America’s biggest. Some Agrium investors are concerned the tie-up would leave them with greater exposure to the slumping crop nutrient potash.

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Field of Dreams: How one Sask potash company hopes to defy the odds and build a mine – by Alex MacPherson (Saskatoon StarPhoenix – September 17, 2016)

http://thestarphoenix.com/

Saskatchewan’s potash industry has grown dramatically and changed rather less in the seven decades since the potassium-rich salts were discovered deep beneath the bald prairie.

The fertilizer is still mined deep underground using conventional methods, then shipped to developing countries, where it’s used to nourish crops and feed a growing global population.

Mike Ferguson knows the established model works. The engineer from Regina spent years working in the province’s potash industry, and helped develop what he now believes is the last mine of its generation: K+S Potash Canada’s Legacy Project. But he believes it could be better.

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Agrium to woo uneasy investors over Potash merger deal – by Rod Nickel (Reuters Canada – September 16, 2016)

http://ca.reuters.com/

WINNIPEG (Reuters) – Canada’s Agrium Inc will woo reluctant shareholders next week in Toronto to support its proposed merger with Potash Corp of Saskatchewan Inc, and seek to appease concerns that it has little to gain by marrying its fertilizer rival.

The $26-billion, all-stock merger would combine Potash’s crop nutrient production capacity, the world’s largest, with Agrium’s farm retail network, North America’s biggest.

It represents a major shift for Agrium Chief Executive Chuck Magro, who at its annual meeting in May sounded neutral at best on potash, said John Goldsmith, vice-president of Montrusco Bolton Investments, a top 20 Agrium investor. “Something must have happened to make him bet the farm on the potash commodity,” Goldsmith said, adding that he is concerned the new company would be too linked to the slumping commodity.

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How investors should play the proposed Agrium-Potash Corp. merger – by Brenda Bouw (Globe and Mail – September 15, 2016)

http://www.theglobeandmail.com/

The $36-billion (U.S.) combination of Agrium Inc. and Potash Corp. of Saskatchewan Inc. has been touted as a “merger of equals,” but shareholders of each company are still scratching their heads about how they might benefit. The deal offers no premium, but a promised half billion dollars in combined savings at a time when companies are looking to cut costs as potash prices remain depressed due to global oversupply.

Shares in each company have fallen about 6 per cent since the merger was officially announced on Sept. 12, suggesting market skepticism. At least one Agrium shareholder says the company could face a backlash from investors since the deal exposes them to more volatile fertilizer markets.

“I think the market is speaking on behalf of everyone,” John Goldsmith, deputy head of equities at Toronto-based Montrusco Bolton Investments Inc., an Agrium shareholder, told Bloomberg News.

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Saskatchewan Premier backs potash merger, but farmers are wary – by Rachelle Younglai (Globe and Mail – September 13, 2016)

http://www.theglobeandmail.com/

The Potash Corp. of Saskatchewan Inc. and Agrium Inc. merger has won tentative support from Saskatchewan Premier Brad Wall, even as farmers complained that it would reduce competition and increase fertilizer prices.

Mr. Wall, who helped stop Anglo-Australian BHP Billiton’s bid for Potash Corp. in 2010, sees benefits flowing to his province, especially given that the merged company would be headquartered in Saskatoon.

“Here is a chance to solidify two existing companies into one larger Canadian champion headquartered in Saskatoon,” he told reporters. “I am glad we fought the fight we did five or six years ago. Without it … there wouldn’t be a Potash Corp. of Saskatchewan and there wouldn’t be an opportunity to create an even larger, more significant entity headquartered in our province.”

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Potash Corp., Agrium agree to merge, creating $36B agriculture giant (CBC News Business – September 12, 2016)

http://www.cbc.ca/news/business/

Deal done as fertilizer industry struggles with plummeting prices down more than 80% in eight years

Potash Corp. of Saskatchewan and Agrium have agreed to merge in a deal that would create a global agricultural giant worth an estimated $36 billion US.

The deal would bring together Saskatoon-based PotashCorp’s huge fertilizer mining operations — the world’s largest by capacity — with Calgary-based Agrium’s extensive global direct-to-farmer retail network. Both companies say the new firm would have close to 20,000 employees, with operations in 18 countries.

Under the terms of the proposed deal, existing Potash shareholders would get 0.4 shares in the new company for every Potash share they own. Agrium shareholders would see their shares converted into 2.23 shares in the new , as yet unnamed, company, which would be headquartered in Saskatoon but have offices in Calgary, too.

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Fertilizer giants Potash Corp., Agrium ink $38-billion tie-up – by Andrew Wellis (Globe and Mail – September 12, 2016)

http://www.theglobeandmail.com/

Agricultural giants Potash Corp. of Saskatchewan Inc. and Agrium Inc. announced a $38-billion (U.S.) merger Monday, unveiling a reworked executive team and plans for an aggressive expansion. The one thing the two agricultural heavyweights didn’t disclose is the name for what will be the world’s largest fertilizer company.

Two weeks after news of merger talks leaked, Potash and Agrium announced terms of a deal their advisers called “Project Champion,” with a reworked executive team and strategy for building the company with $500-million of annual cost savings and aggressive expansion of a business that has 20,000 employees in 18 countries selling crop nutrients to farmers.

The merger is expected to be finalized by the middle of 2017, if shareholders, regulators and Canadian courts sign off, and the two companies said Monday they plan to announce a new name for what will be the third largest global commodity company prior to closing the deal.

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Proposed Potash-Agrium merger puzzles analysts – by Natalie Obiko Pearson (Globe and Mail/Bloomberg – September 9, 2016)

http://www.theglobeandmail.com/

Over the last three years, Potash Corp. of Saskatchewan Inc., Canada’s giant fertilizer producer, has scrapped two blockbuster deals proposed by two different leaders. Now Jochen Tilk is circling a third with Agrium Inc.

The question analysts are asking is: Why?

“You can come up with a rationale if you try hard enough, but it’s still kind of puzzling,” said Neil Fleishman, head of research at Green Markets, a unit of Bloomberg BNA. “It seems like a move just to make a move.”

Potash Corp. and Agrium, based in Calgary, said last month they’re in talks to merge one of the world’s largest producers of potash, a commonly used fertilizer for hundreds of years, with a farm supply retailer. If they agree, the deal would be substantial: Potash Corp. was valued at $14.8-billion (U.S.) as of the end of trading Tuesday, while Agrium sat at $13.3-billion.

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Gypsum blues: Manatee County sets the stage for phosphate mining – by Seán Kinane (Creative Loafing Tampa – September 8, 2016)

http://www.cltampa.com/

It’s a story Florida’s environmental champions have heard many times before: decision makers ignoring the pleas of the public (and the science) and siding with monied interests. This time, it’s happening in south Tampa Bay.

Despite objections from residents, a new 3,837-acre phosphate mine could be coming to eastern Manatee County.

On September 15, the Manatee Board of County Commissioners will vote on whether to rezone an area known as the Wingate East Parcel from agriculture to mining/extraction as well as on a master mining plan for Wingate East Mine. These changes, requested by Mosaic Fertilizer, LLC, were recommended by the Manatee County Planning Commission during an all-day meeting on August 18, despite objections from several members of the public.

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Potash’s Tilk Wagering That Third Time’s a Charm in Agrium Talks – by Natalie Obiko Pearson (Bloomberg News – September 7, 2016)

http://www.bloomberg.com/

Over the last three years, Potash Corp., Canada’s giant fertilizer producer, has scrapped two blockbuster deals proposed by two different leaders. Now Jochen Tilk is circling a third with Agrium Inc.

The question analysts are asking is: why? “You can come up with a rationale if you try hard enough, but it’s still kind of puzzling,” said Neil Fleishman, head of research at Green Markets, a unit of Bloomberg BNA. “It seems like a move just to make a move.”

Potash Corp. of Saskatchewan Inc. and Agrium, based in Calgary, said last month they’re in talks to merge one of the world’s largest producers of potash, a commonly used fertilizer for hundreds of years, with a farm supply retailer. If they agree, the deal would be substantial: Potash Corp. was valued at $14.8 billion as of the end of trading Tuesday, while Agrium sat at $13.3 billion.

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Remember that other Potash bid? ‘Net benefit’ remains unresolved – by Walid Hejazi (Globe and Mail – Septmeber 03, 2016)

http://www.theglobeandmail.com/

Walid Hejazi is associate professor of international business at the University of Toronto’s Rotman School of Management.

Remember 2010, when the Canadian government blocked BHP Billiton’s proposed takeover of Potash Corp., ruling that the deal would not provide a net benefit for Canada?

This week’s news of a proposed merger between Agrium Inc. and Potash Corp. reminds us that Ottawa still hasn’t resolved its approach to foreign takeovers. Since any Agrium-Potash deal will be between Canadian firms, it won’t be looked at through the net-benefit lens.

But while there will be benefits in a merger, there will no doubt be job losses. One of the two head offices will be closed or downsized in addition to the potential loss of mining jobs.So why would this merger be met with less opposition than the proposed BHP Billiton takeover? It’s our flawed attitude to foreign takeovers.

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Potash-Agrium deal will be ‘heavily scrutinized,’ face antitrust hurdles – by Rachlle Younglai (Globe and Mail – September 02, 2016)

http://www.theglobeandmail.com/

A merger between Potash Corp. of Saskatchewan Inc. and Agrium Inc. will face steep antitrust hurdles in Canada and the United States, as the Canadian fertilizer producers vie to become a global agriculture powerhouse.

The companies, which are in preliminary talks to merge, are two of the three major potash suppliers in North America, as well as big players in other crop nutrients such as nitrogen and phosphate.

The potential deal, with a combined market value of $37-billion, would increase their market share in fertilizer and put them in the crosshairs of antitrust regulators on both sides of the border.

“It’s going to be very heavily scrutinized,” said Chris Hersh, an antitrust lawyer with Cassels Brock & Blackwell LLP.

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