Agrium and PotashCorp set closing date for merger of equals

Potash Corporation of Saskatchewan Inc. and Agrium Inc. announced Dec. 27 they have received clearance from the United States’ Federal Trade Commission and have now obtained all regulatory approvals required to close their proposed merger of equals transaction to create a merged company to be called Nutrien.

The transaction is expected to close effective Jan. 1, 2018 and remains subject to customary closing conditions.

“This final clearance marks a significant milestone in bringing two industry leaders together,” said Chuck Magro, president and CEO of Agrium. “Given our extensive integration planning work, we expect to move quickly upon closing to begin delivering on the many strategic benefits and synergy potential of this combination.”

“We are pleased to have received final regulatory clearance and look forward to the formation of Nutrien,” said Jochen Tilk, president and CEO of PotashCorp. “Nutrien will build upon the impressive legacies and best practices of both companies to create long-term value for all our stakeholders.”

With the closing of the transaction on Jan. 1, 2018, the common shares of Nutrien are expected to commence trading on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol “NTR” at the opening of market on Jan. 2, 2018. Trading of Agrium common shares and PotashCorp common shares is expected to be suspended at the opening of market on Jan. 2, 2018, and such shares will be delisted at the close of market on the same date. Cash entitlements in lieu of fractional Nutrien common shares will be based on the trading price of the Nutrien common shares on the TSX on the first five days of trading on such exchange. Such entitlements will be delivered as soon as practicable thereafter to former Agrium and PotashCorp shareholders who have submitted their duly completed letters of transmittal and elections forms in accordance with the procedures described in the applicable letter of transmittal and election form.

According to an FTC release, the two companies have agreed to divest themselves of two U.S. production facilities in order to settle FTC charges that their proposed merger would negatively impact competition in two relevant markets.

According to the FTC’s complaint, the proposed merger would likely harm competition in two markets: the North American market for superphosphoric acid, a highly concentrated form of phosphoric acid that contains the essential crop nutrient phosphate; and the market for “65 to 67 percent concentration nitric acid” sold to customers near and to the east of the parties’ nitric acid plants in Ohio.

SPA, or superphosphoric acid, is marketed to agricultural wholesalers and retailers, who use it to produce the liquid phosphate fertilizer known as ammonium polyphosphate, which in turn is sold to farmers. PotashCorp and Agrium are two of only three firms in North America that manufacture SPA, according to the complaint, and SPA is rarely imported from overseas.

The 65 to 67 percent concentration nitric acid is used for making nitrogen-based fertilizers and explosives. This product is also sold for a variety of other industrial uses, including manufacture of stainless steel, metal-based specialty chemicals and products used in water-treatment and cleaning.

PotashCorp and Agrium each have plants in Ohio that manufacture nitric acid, and are the two primary suppliers of 65 to 67 percent concentration nitric acid in Ohio, Kentucky, Pennsylvania, Maryland, West Virginia and New Jersey.

According to the complaint, for most customers, there are no functionally equivalent chemical substitutes for 65 to 67 percent concentration nitric acid and entry in the affected region is unlikely.

According to the complaint, without a remedy, the merger would eliminate head-to-head competition between PotashCorp and Agrium for sales of SPA, enhance the new firm’s ability and incentive to raise SPA prices and increase the likelihood of coordination between competitors in the market. The merger would also eliminate the vigorous competition that exists today between PotashCorp and Agrium for sales of 65 to 67 percent concentration nitric acid in the relevant geography.

To remedy competition concerns arising from the proposed merger, under the terms of the settlement with the FTC, PotashCorp and Agrium will divest two of Agrium’s U.S. facilities and related assets.

Agrium’s Conda, Idaho SPA facility will be divested to Itafos; and its North Bend, Ohio nitric acid facility will be divested to Trammo.

Further details about the consent agreement—which provides for the commission to appoint a monitor to ensure compliance with the order—are set forth in the analysis to aid public comment for this matter. The commission voted to issue the complaint and accept the proposed consent order for public comment was 2 to 0.

The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, continuing through Jan. 29, 2018, after which the commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

Additional information on the merger between Agrium and PotashCorp can be found at the following website http://www.worldclasscropinputsupplier.com/. Information about Agrium and PotashCorp can be found under their respective corporate profiles on SEDAR at www.sedar.com or on EDGAR at www.sec.gov, respective websites at www.agrium.com and www.potashcorp.com.

About PotashCorp

PotashCorp is the world’s largest crop nutrient company and plays an integral role in global food production. The company produces the three essential nutrients required to help farmers grow healthier, more abundant crops. With global population rising and diets improving in developing countries, these nutrients offer a responsible and practical solution to meeting the long-term demand for food.

PotashCorp is the largest producer, by capacity, of potash and one of the largest producers of nitrogen and phosphate. While agriculture is its primary market, the company also produces products for animal nutrition and industrial uses. Common shares of Potash Corporation of Saskatchewan Inc. are listed on the Toronto Stock Exchange and the New York Stock Exchange.

About Agrium

Agrium Inc. is a major global producer and distributor of agricultural products, services and solutions. Agrium produces nitrogen, potash and phosphate fertilizers, with a combined wholesale nutrient capacity of approximately eleven million tonnes and with significant competitive advantages across our product lines.

Agrium supplies key products and services directly to growers, including crop nutrients, crop protection, seed, as well as agronomic and application services, thereby helping growers to meet the ever growing global demand for food and fiber.

Agrium retail-distribution has an unmatched network of approximately 1,500 facilities and over 3,300 crop consultants who provide advice and products to our grower customers to help them increase their yields and returns on hundreds of different crops.

With a focus on sustainability, the company strives to improve the communities in which it operates through safety, education, environmental improvement and new technologies such as the development of precision agriculture and controlled release nutrient products.

Agrium is focused on driving operational excellence across our businesses, pursuing value-enhancing growth opportunities and returning capital to shareholders. For more information visit www.agrium.com.

Larry Dreiling can be reached at 785-628-1117 or [email protected].