August 6, 2012

US fertiliser maker CF Industries to buy Canadian Fertilisers' minority stake

An agreement to buy the minority stake in Canadian Fertilisers Ltd (CFL) currently held by agribusiness Viterra Inc from Swiss Glencore International Plc has been announced by CF Industries Holdings Inc.

Under the terms of the definitive deal, CF Industries will pay CAD915 million (US$910.7 million) in cash, subject to certain adjustments, for a 34% stake in CFL. The transaction also includes a product purchase agreement. The US company already holds the other 66% in the target.

CF Industries' chairman and CEO Stephen Wilson said that this acquisition represents a low-risk expansion of the company's nitrogen supply capability. The transaction will add some 425,000 gross tonnes of ammonia and 275,000 tonnes of urea a year, he added.

In March 2012, Glencore sealed a deal to buy Viterra for CAD16.25 (US$16.23) per share, or a total CAD6.1 billion (US$6.09 billion). To close the minority stake purchase in CFL, CF Industries will need to wait for Glencore to complete its own acquisition of Viterra. In addition, the fresh deal is subject to regulatory approvals in Canada and some other conditions.

CFL is the owner of Canada's largest nitrogen fertiliser complex, located in Medicine Hat, Alberta. It features two ammonia plants and a urea facility with 1.25 million and 810,000 tonnes of production capacity, respectively.