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Yara And CF Disclose Merger Discussions

Business: A combined firm would far and away be the world’s champion in nitrogen fertilizers

by Alexander H. Tullo
September 24, 2014

Credit: Yara
A Yara fertilizer terminal in Stockton, Calif.
Yara logo at top of fertilizer terminal
Credit: Yara
A Yara fertilizer terminal in Stockton, Calif.

The largest nitrogen fertilizer maker in the world may combine with the leader in North America. Norway’s Yara International is in talks with Deerfield, Ill.-based CF Industries over a “merger of equals” that would create a $20 billion-per-year plant nutrient powerhouse.

The companies haven’t released more details and caution that the talks may not yield a transaction. Such mergers generally involve the exchange of stock and possibly cash.

Yara calls itself the world’s largest nitrogen fertilizer maker, with more than 8 million metric tons per year of ammonia capacity. The company had an operating income of $2.5 billion last year on sales of $14.4 billion. It is also one of the only global suppliers in an industry that is dominated by regional players.

In recent years, Yara has been aggressively expanding in the Americas. It established a toehold in North America in 2008 with its purchase of Saskferco from Mosaic and the government of Saskatchewan. Last year, it bought Bunge’s Brazilian fertilizer business.

To cash in on low-cost shale natural gas feedstocks, Yara is planning an ammonia plant in Freeport, Texas, in cooperation with BASF.

CF is the largest nitrogen fertilizer maker in North America with over 7 million metric tons of ammonia capacity. It had operating income of $2.4 billion last year on sales of $5.5 billion.

Like Yara, CF has been on a growth trajectory. The company, which started out as a farmer’s cooperative, went public in 2005. In 2010, it purchased the fertilizer maker Terra Industries, beating out rival offers from Yara.


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