Announced Merger Terms Favor Agrium Shareholders at the Expense of Potash Corp.
Following reports a couple weeks ago that Agrium and Potash Corp were considering a merger, the companies announced a "merger of equals" on Monday, potentially creating the world's largest crop nutrient company.Given our stand-alone company fair values--$20 per share for Potash Corp. and $96 per share for Agrium--the deal terms (52% ownership of the combined company by Potash Corp shareholders) favor Agrium shareholders, in our view. Exclusive of synergies and using the announced share exchange...
Potash Corp. of Saskatchewan isa fertilizer producer by capacity producing the three primary crop nutrients: potash, nitrogen and phosphate, which is used for agricultural, industrial and animal nutrition purposes. Co.'s potash operations include the mining and production of potash, which is used as fertilizer. Co.'s phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, phosphate feed and industrial acid, which is used in food products and industrial processes. Co.'s nitrogen operations include production of nitrogen fertilizers and nitrogen feed and industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate and nitric acid.
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