Yara Buys Canadian Fertilizer Plant

Norwegian fertilizer maker Yara International has agreed to buy Saskferco, the nitrogen fertilizer joint venture between Mosaic and government-owned Investment Saskatchewan, for $1.6 billion.

In the deal expected to close by the end of September, Yara will receive its first major plant in North America: Saskferco's plant in Belle Plaine, Saskatchewan. The facility, one of the largest of its kind in the region, has a capacity of 650,000 metric tons of ammonia, 980,000 metric tons of urea, and 230,000 metric tons of urea ammonium nitrate fertilizers.

Yara already has a global capacity of 7 million metric tons of ammonia and 2.6 million metric tons of urea. During its fiscal year that ended in May, Saskferco generated about $500 million in revenues and earned about $200 million before taxes.

Booming global food production and rising biofuel demand have pushed fertilizer prices to record highs. Mosaic says the Saskferco sale will allow it to focus on its phosphate and potash fertilizer businesses.