Toronto-Hanfeng Evergreen Inc., a leading producer of slow- and controlled-release fertilizers in China, said July 16 that it has agreed to purchase Agrium Inc.’s ownership in Hanfeng’s subsidiary known as Hanfeng Slow Release Fertilizer (Canada) Co. Ltd. (Subco). Subco is responsible for developing sulfur-coated urea (SCU). Hanfeng will purchase Agrium’s 50 percent ownership in Subco for $2.3 million in cash, while Agrium will receive 100,000 shares in the parent company, Hanfeng. As a result, Agrium’s ownership in Hanfeng will increase from 19.4 percent to 19.6 percent effective July 16, 2010. The transaction is subject to Toronoto Stock Exchange approval. The purchase of Subco by Hanfeng is not expected to have a material effect on either the company’s EBITDA or earnings per share. Agrium had acquired its 50 percent interest in Subco in April 2009 through the exercise of an option granted under the agreements pursuant to which Agrium became a shareholder of Hanfeng in April 2007. Subco’s assets include a 50,000 mt/y SCU facility in Shanxi province, China, and the perpetual license for SCU production in China. Hanfeng said the sale is a result of Hanfeng broadening its strategic focus to build facilities that have a broad range of products, including SCU. Agrium confirmed the news.
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