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Saskatchewan Mining

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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‘They are absolutely huge:’ Wolves attack [uranium miners] in Northern Saskatchewan as animals lose fear of humans – by Tristin Hopper (National Post – September 15, 2016)

http://news.nationalpost.com/

From the dining hall, it sounded like a fight — a midnight scuffle between feuding workers at the Cigar Lake uranium mine.

A security guard hopped into her vehicle to break it up, and for a split second, her headlights illuminated a scene that was anything but a fist fight: a wolf with its jaws around the neck of a 26-year-old kitchen worker. The truck’s arrival spooked the wolf away and the security guard, who has declined media interviews, sprang out to provide first aid.

An adult gray wolf can easily bite through even the thickest moose bones; a fleshy human neck provides little obstacle. A few more seconds and the worker likely would have been dead instead of recuperating in hospital. “A single wolf basically pounced on him,” was what a mine representative told the press.

Wolf attacks aren’t supposed to happen this way, but wolves don’t exactly act as expected in Northern Saskatchewan.

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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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‘A very particular time and place in Canada’s history’: New book recalls Saskatchewan’s forgotten uranium mine – by Alex MacPherson (Saskatoon StarPhoenix – September 12, 2016)

http://thestarphoenix.com/

Almost nothing is left of the Gunnar uranium mine. What didn’t decay after the mine on the north shore of Lake Athabasca was abandoned more than five decades ago was later hauled away as part of a massive — and massively over-budget — cleanup operation. Patricia Sandberg, whose father and grandfather worked for Gunnar Mining Ltd., and who spent eight years of her childhood at the northern Saskatchewan mine, worries it will be forgotten altogether.

“It is a part of Canadian history that most people don’t know about, and I think it’s really important,” said Sandberg, whose new book, Sun Dogs and Yellowcake, chronicles the mine’s history and records the stories of the people who lived and worked there.

The Gunnar uranium mine, located about 800 kilometres north of Saskatoon, was discovered by prospectors working for Gilbert LaBine, the Ontario-born explorer who is widely considered the father of Canada’s uranium industry.

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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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Uranium mining contributes small fraction of total nuclear power emissions, study says – by Alex MacPherson (Saskatoon StarPhoenix – September 8, 2016)

http://thestarphoenix.com/

Despite critics’ claims that mining and milling uranium is a hidden cost in the comparatively clean nuclear fuel cycle, extracting the radioactive material produces only a small fraction of the process’s total emissions, according to the author of a new study.

“There were some gaps in our understanding about what the actual emissions from the full nuclear fuel cycle were,” University of Saskatchewan engineering graduate student David Parker said of the idea underlying the study.

“One area with a lot of gaps that critics was pointing to was mining and milling. The thought was this gap in our understanding of greenhouse gas emissions from uranium mining and milling might be a significant contributor to total emissions.”

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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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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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Why a Potash-Agrium merger might end up growing on investors – Joe Chidley (Financial Post – September 1, 2016)

http://business.financialpost.com/

Nothing excites investors like fertilizer, apparently. On Tuesday, two Canadian heavyweights in the business — Calgary-based Agrium Inc. and Saskatoon-based Potash Corp. — confirmed they were in talks to get together, and investors jumped on the haywagon. Since news of this potential “merger of equals” broke, Potash shares have climbed by more than 12 per cent, Agrium’s by nearly eight.

No doubt, there is a lot that makes sense about this deal, should it happen. Potash Corp. is the world’s largest producer of, well, potash (nutrient-form potassium), and also has its hand in nitrogen and phosphorus — the other two elements in the fertilizer triumvirate. Agrium produces its own fair share of P-N-K, too, but also manages a mega-network of North American agricultural stores.

With a merger, both companies would enjoy less competition (and the global fertilizer industry is highly competitive); Potash would diversify its revenue stream; Agrium would get enhanced production capacity. Add in the usual merger-benefit expectations — synergies, efficiencies, cost reductions, etc. — and the markets have got very excited, indeed.

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Potash developments spark Saskatchewan political fight – by Jennifer Quesnel (CBC News Saskatoon – August 31, 2016)

http://www.cbc.ca/news/canada/saskatoon/

NDP Opposition critical of move to allow Chinese government-owned Yancoal to mine Sask. potash

As PotashCorp and Agrium enter negotiations on a possible merger, Saskatchewan political leaders can agree on one thing: they want to keep jobs in Saskatchewan, and keep potash royalties streaming into provincial coffers.

They differ on their approach to the potash industry’s future. A few hours after both fertilizer companies announced merger talks Tuesday, Premier Brad Wall told reporters at the provincial legislature he’d spoken with both companies’ CEOs, and sees positives in a potential deal.

“We would want to see Sask’s interests protected and furthered,” Wall said. “We would view this potentially, if it were to come to fruition, as an opportunity to perhaps pursue an even greater corporate presence in Saskatchewan on behalf of the new merged entity.”

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Rival bids would deepen intrigue in potash saga – by Andrew Willis (Globe and Mail – August 31, 2016)

http://www.theglobeandmail.com/

Fertilizer giants Potash Corp. of Saskatchewan Inc. and Agrium Inc. left the door ever so slightly open to a competing offer for their companies after they were forced Tuesday to reveal that they are working on a multibillion-dollar merger.

Rival resource companies are duty-bound to see whether they can squeeze through that crack, egged on by bankers anxious to play a role in the biggest commodity deal in years.

As the latest converts to the logic that bigger is better when it comes to commodities, Potash and Agrium are talking about a “merger of equals” that would create an entity worth more than $35-billion. That approach dictates that neither company’s shareholders receive a takeover premium, and there’s no cash – only an exchange of shares.

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Fertilizer giants Potash Corp., Agrium in merger talks – by Rachelle Younglai (Globe and Mail – August 31, 2016)

http://www.theglobeandmail.com/

Potash Corp. of Saskatchewan Inc. and Agrium Inc. said that they are in preliminary talks to merge, as the two Canadian companies grapple with weak fertilizer prices and a glut of potash in the market.

The companies said no agreement has been reached and there was no guarantee that the discussions would lead to a deal. Talk of a merger comes as the oversupply of potash has crimped corporate profits and given buyers such as China the upper hand.

Potash Corp. has seen prices for potash plunge to $154 (U.S.) a tonne in the second quarter from $273 last year. Its other two products, nitrogen and phosphate, have also lost value. This is the second time Potash Corp.’s relatively new CEO, Jochen Tilk, has tried to consolidate the fertilizer industry since taking over as chief executive in 2014.

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