Morningstar | No Changes to Our Outlook as Chilean Court Approves Sale of Nutrien's SQM Equity Stake to Tianqi
On Oct. 4, SQM announced that the Chilean anti-trust court approved Nutrien's 24% equity stake in SQM to Tianqi Lithium. The court ruling was the last regulatory approval needed in order to close the deal. We had already assumed a 100% probability that the deal would close after Chilean regulators approved the deal in September. We continue to expect the deal to close by the end of 2018. With no changes to our outlook, we maintain our narrow-moat Nutrien fair value estimates of USD 65 per share and CAD 85 per share, respectively. Our USD 65 per share fair value estimate for narrow-moat SQM is also unchanged.After the transaction closes, Tianqi will be able to appoint three of SQM's eight board seats. Before the ruling was announced, SQM issued a news release against the transaction noting that the three board seats would have a negative impact on SQM's corporate activities. As we wrote in our May 17 note when the Nutrien-Tianqi transaction was announced, we think Tianqi's ability to influence SQM's actions will be limited. Although SQM may sell lithium to Tianqi's battery business, we continue to expect that any lithium sale from SQM to Tianqi's battery business would occur at short-term prices similar to those of other lithium producers.
For more information, see our May 17 note, "Nutrien Announces Proposed SQM Equity Stake Sale to Tianqi Lithium."
Nutrien Ltd is Canada-based crop nutrient producer and distributer of potash, nitrogen and phosphate products for agricultural, industrial and feed customers worldwide. The Company is focused on retail, potash, nitrogen and phosphate mining and processing operations. The Company's retail operations serve growers in a number of countries across the United States, Canada, South Africa, Australia and South America. The Company operates six potash mines in Saskatchewan and has a mine in New Brunswick in care-and-maintenance mode. The Company operates integrated phosphate mining and processing facilities, as well as a number of smaller upgrading plants in the United States.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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