The world’s biggest crop nutrient company, Potash, is merging with Agrium, North America’s largest farm retailer. The deal could draw scrutiny from U.S. regulators. Bobbi Rebell reports.
Potash, Agrium merge to create $36bln company
A big Canadian merger plan in the fertilizer business could also draw scrutiny from U.S. regulators.
Canada’s Agrium and Potash have agreed on a deal that would create a $36 billion company. If completed, the new firm will be the largest crop nutrient producer in the world.
A merger would give Potash a direct channel to U.S. farmers through Agrium’s retail stores, which as of May accounted for 17 percent of the U.S. market. Industry watchers said, this and other factors would catch the attention of U.S. regulators.
Fertilizer companies have been facing lower profits, because crop nutrient prices have tumbled. It’s a simple case of excessive supply and weak demand.
Crop prices have also been hurt, with corn and wheat at seven-year and ten-year lows, respectively, giving farmers less incentive to maximize production with fertilizer.