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Potash and Agrium to merge to create fertilizer giant

Staff Writer | September 12, 2016
Canada's Agrium and Potash of Saskatchewan agreed to merge to create the world's largest fertilizer company and navigate a severe industry slump.
Merger   Corn prices have touched seven-year lows
Potash shareholders will own 52 percent of the new company, with Agrium shareholders owning the rest if the deal closes in mid-2017 as the companies hope, they said.

Agrium CEO Chuck Magro will be CEO of the merged company, whose market capitalization is projected at $26 billion. Potash CEO Jochen Tilk will become executive chairman.

Potash is already the world's biggest crop nutrient company by capacity, and Agrium is North America's largest farm retailer.

The combined company would be dominant in North America, controlling nearly two-thirds of potash capacity, 30 percent of phosphate production capability and 29 percent of nitrogen capacity, according to National Bank Financial.

The tie-up comes as fertilizer companies' profits have fallen due to excessive supply and weak demand.

Corn prices have touched seven-year lows and wheat 10-year lows, giving farmers less incentive to maximize production with fertilizer.