Fertilizer giants CF Industries and Yara end merger talks
17 Oct 2014
US and Norwegian fertilizer companies CF Industries Holdings Inc and Yara International ASA ended merger talks after both companies failed to agree on terms of a deal that would have created the world's largest maker of nitrogen fertilizer.
''Although we identified very significant operational and structural synergies, we were ultimately unable to agree on terms of a transaction that met the requirements of all our respective shareholders,'' said, Tony Will, president and CEO of CF Industries.
CF did not disclose the reasons and did not elaborate for ending the merger talks, while Yara has yet to comment.
CF and Yara had late last month said that they were in talks towards a ''merger of equals,'' and a successful deal would have created a company with an enterprise value of around $30 billion and revenues of around $18.4 billion.
With Yara's strong presence globally and CF's dominant position in the US and Canada as well access to cheap natural gas, the merger would have brought in synergies. Yara generates more than 80 per cent of its $12.9 billion annual sales outside of North America, while CF generates nearly 85 per cent of its $5.5 billion annual sales in the North American region.
Founded in Norway in 1905, Yara has a worldwide presence with sales to 150 countries and is the world's largest producer of ammonia, nitrate and complex fertilizer holding about 20 per cent of global ammonia trade.
Yara, which is 36.2 per cent owned by the Norwegian government, operates in 54 countries and has a strong presence in Europe, Africa, and in the Asia/Ocenia region.
The Norwegian government had earlier said that it would not cut its stake below 34 per cent and any reduction would require parliamentary approval .
Illinois-based CF operates seven nitrogen fertilizer manufacturing plants in the central US region and Canada and a network of fertilizer distribution terminals and warehouses, located primarily in major grain-producing states in the US Midwest.
It also holds a 50-per cent stake in Switzerland-based Keytrade AG, a global fertilizer trading company, as well as 50 per cent of joint ventures in the UK and the Republic of Trinidad and Tobago.
