Agrium, Potash planning merger

Canadian fertilizer giants Agrium Inc. and Potash Corp. of Saskatchewan Inc., on Monday said they plan to merge, creating one of the largest crop-nutrient companies in the world, with a worth of about $36 billion and nearly 20,000 employees.

Agrium, based in Calgary, Alberta, has operations worldwide, including Loveland, Greeley and Denver. How the merger will affect operations in Northern Colorado has not been divulged by the companies.

Potash shareholders will own about 52 percent of the new company, and Agrium shareholders will own about 48 percent, according to a joint statement. Potash shareholders will receive 0.4 common share of the new company for each common share they own, and Agrium shareholders will receive 2.23 common shares of the new company for each common share of Agrium they own.

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The deal is expected to close in mid-2017 and is subject to customary closing conditions, including approvals by regulators, Canadian courts and shareholders.

Agrium has been expanding its operations in Northern Colorado. Agrium Inc. broke ground in July on a four-story, 120,000-square-foot office building in Loveland that will be home to the company’s U.S. corporate and wholesale office employees.

In June, Agrium opened a new research facility in Greeley, where it also operates a production facility. The new 18,000-square-foot facility — The Agrium Wholesale Lab and Pilot Plant in the West Greeley Tech Center — is used for researching and testing new fertilizer products.

For the first six months of 2016, Saskatchewan-based Potash’s earnings fell 75 percent to $196 million, as the company’s average sale price for the fertilizer declined to $154 a ton in the second quarter, from $273 in the year-earlier period and $387 a ton in the fourth quarter of 2014 before the collapse of the Russian-Belrusian sales partnership.

Agrium’s earnings declined almost 18 percent to $568 million in the first half of 2016, from the year-earlier period.

Joining forces helps Potash, the world’s largest fertilizer producer by capacity, insulate its earnings against volatile moves in crop-nutrient prices by giving it access to Agrium’s steadier retail business that sells fertilizer, seeds and equipment, the companies said in a prepared statement.

Agrium’s chief executive and president, Chuck Magro, said in a conference call Monday morning the planned merger is the culmination of two years of private talks with Potash Corp.’s CEO Jochen Tilk, who will become executive chairman of the combined company. Magro will become CEO of the company that will be based in Saskatoon, Potash’s current headquarters.

Agrium has more than 1,200 retail outlets, mostly located in Canada and North America, and sells a little more than 10 percent of the nitrogen, phosphate and potash it manufactures to industrial customers. The rest goes to retail customers.