CF Industries, OCI Talk Deal

In what possibly could result in a large transatlantic fertilizer merger, Amsterdam-based OCI and CF Industries, of Deerfield, Ill., have disclosed they are in negotiations for possible “combinations or transactions.”

Neither company is commenting further, and both are stressing that the discussions may not yield deals.

CF Industries calls itself the largest fertilizer maker in North America. It has 7.4 million tons per year of ammonia capacity, as well as downstream urea and urea ammonium nitrate production at plants in the U.S. and Canada. It also holds ammonia joint ventures in Trinidad & Tobago and the U.K.

The company has been involved in its share of transactions over the past few years. It was in merger talks with Norway’s Yara last year. Those discussions did not result in a deal. However, it did ink an agreement with Yara earlier this month to buy Yara’s stake in its U.K. GrowHow fertilizer joint venture.

Last year, CF sold its phosphates business, composed mostly of phosphate mining operations in Florida, to Mosaic. In 2010, it purchased Terra Industries after a bidding war with Yara.

OCI is in the process of separating from its former parent, Egyptian conglomerate Orascom Construction Industries. OCI has 4.5 million metric tons of ammonia capacity and downstream urea and urea ammonium nitrate production at plants in Egypt, Algeria, and the Netherlands, as well as through its OCI Partners affiliate in Beaumont, Texas. Another OCI affiliate, Iowa Fertilizer, is building a 1.5 million-metric-ton-per-year nitrogen fertilizer plant in Wever, Iowa.

OCI also has about 2.7 million metric tons of methanol production. However, CF’s release about the merger discussions notes that the combination would involve only “certain of OCI’s businesses,” implying the methanol businesses could be left out of possible transactions.