Yara, CF Industries end fertilizer merger talks

DEERFIELD, US/OSLO, NORWAY: CF Industries Holdings Inc ended merger talks with Norway’s Yara International ASA after the companies failed to agree on terms of a deal that would have created a global fertilizer concern with an enterprise value approaching $30 billion.

CF and Yara said last month they were in early-stage talks about a ‘merger of equals’ that would challenge the world’s largest fertilizer producer, Canada’s Potash Corp of Saskatchewan, in an oversupplied and fragmented market. But the discussions ended after CF concluded that a proposed all-stock merger, which would have given the two companies a roughly 50-50 ownership, did not adequately reflect the value of the US company’s significant near-term capacity expansions.

Despite having identified ‘significant’ operating and financial synergies, CF has determined that any deal would require a share-for-share exchange ratio that exceeds the levels discussed when the two companies first started negotiations and would have to give it a meaningfully higher ownership than 50 per cent, said a spokesperson.

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