Agrium Inc., Calgary, announced Nov. 7 that it has signed a definitive asset purchase agreement with Itafos, whereby Agrium will sell its Conda, Idaho, phosphate production facility and adjacent phosphate mineral rights for a sale price of approximately $100-million, including working capital. Agrium has also entered into a definitive asset purchase agreement with Trammo Nitrogen Products Inc., a wholly-owned subsidiary of Trammo Inc., whereby Agrium will sell its North Bend, Ohio Nitric Acid facility.
The Conda facility and related assets include the entirety of Agrium’s superphosphoric acid business in North America and the North Bend facility represents the entirety of Agrium’s nitric acid business in the Midwest region. These divestitures are intended to address U.S. regulatory concerns raised with respect to Agrium’s merger with Potash Corp. of Saskatchewan Inc. and are subject to U.S. Federal Trade Commission’s approval.
As part of the sale of the Conda business, Agrium and Itafos will enter into long-term strategic supply and off-take agreements as part of the transaction. Under the terms of the supply and off-take agreements, Agrium will supply 100 percent of the ammonia requirements of Conda Phosphate Operations and purchase 100 percent of MAP product produced, with pricing formulas for both tied to benchmark phosphate fertilizer prices.
Agrium is expected to record a non-cash impairment of $178-million, net of tax (gross of tax $295-million) associated with the sale of Conda and will retain the historical environmental obligations.