CVR Partners LP and Rentech Nitrogen Partners, L.P. (NYSE: RNF) announced today the execution of a definitive merger agreement under which CVR Partners will acquire all outstanding units of Rentech Nitrogen. The combination excludes Rentech Nitrogen’s Pasadena facility, which will be retained by current holders of Rentech Nitrogen, or sold separately for their benefit. Total consideration for Rentech Nitrogen excluding the Pasadena facility is $533 million, implying a total enterprise value of approximately $839 million, based on closing prices on August 7, 2015. The transaction is the culmination of a strategic review process publicly announced by Rentech Nitrogen on February 17, 2015.

Under the terms of the transaction, each outstanding common unit of Rentech Nitrogen will be exchanged for 1.04 units of CVR Partners and $2.57 of cash. The value of the CVR Partners units plus the cash consideration, which excludes the value of the Pasadena facility, represents a 20.3 percent premium to the unit value implied from the unaffected exchange ratio on February 16, 2015, one day before Rentech Nitrogen announced its process to explore strategic alternatives; a 32.9 percent premium at the current exchange ratio; or a 14.1 percent premium to the unit value implied from the last 30-day volume weighted average price exchange ratio through August 7, 2015. Any value realized from the sale of the Pasadena facility would add to such premium.

Upon closing of the transaction, Rentech Nitrogen’s unitholders (including Rentech Inc.) will own approximately 40.5 million units, or 35.6 percent, of the combined partnership. As part of the transaction, CVR Partners will assume or refinance Rentech Nitrogen’s net debt, which was approximately $307 million as of March 31, 2015.

"The merger of CVR Partners and Rentech Nitrogen Partners creates a new leader in the growing nitrogen fertilizer industry. Once the merger is complete, we will be the second largest producer of urea ammonium nitrate (UAN) in North America," said Jack Lipinski, executive chairman of CVR Partners. "In addition to enhancing our current attractive market position, we expect the merger will be double-digit accretive to distributable cash per unit before synergies. The combination of our two strategically located fertilizer assets in Kansas and Illinois, a strong combined balance sheet and highly experienced management teams positions the merged companies to generate long-term value for unitholders."  

"The addition of Rentech Nitrogen’s East Dubuque fertilizer facility increases our scale and diversifies our geography and raw material feedstock," said Mark Pytosh, chief executive officer of CVR Partners. "Our customers will benefit from the expanded availability and variety of nitrogen fertilizer products manufactured at the two facilities. The merger also expands our footprint into the upper Corn Belt region, which has the largest concentration of users in the U.S. for the direct application of nitrogen fertilizer products.

"The merger of CVR Partners and Rentech Nitrogen Partners brings significant value to our respective unitholders, customers and employees," Pytosh said. "We welcome the talented and experienced Rentech Nitrogen employees to CVR Partners."

"We believe this combination with CVR Partners is a compelling opportunity to create value for Rentech Nitrogen’s unitholders. The transaction is structured to provide our unitholders with significant value, as well as the chance to participate in future value creation in a combined partnership that is well-positioned for success," said Keith Forman, chief executive officer of Rentech Nitrogen. "We believe that the resulting company will benefit from larger scale; diversification of plants, feedstocks, and markets; and reduced costs. We intend to immediately return to a focused pr

K+S Group said today that a survey of private shareholders showed opposition to a sale of the company to Potash Corp. of Saskatchewan Inc. Some 30 percent of 140,000 private shareholders responded. The company said some 84 percent of the respondents rejected the PotashCorp bid.
  
"Our private shareholders have made their position clear. They share the assessment of the K+S Board of Executive Directors and Supervisory Board that the current PotashCorp proposal fails to reflect the fundamental value of K+S. At the same time, our private shareholders have given us a clear mandate to keep on realizing what they consider to be attractive future prospects for K+S," said Norbert Steiner, Chairman of the Board of Executive Directors of K+S.  
 
The survey was carried out and evaluated by a market research institute on behalf of K+S.

Extremely wet weather impacted second-quarter results for The Andersons. Plant Nutrient income dropped 30 percent to $18.9 million on sales of $357.2 million from the year-ago $27 million and $354.8 million, respectively. Company-wide, second-quarter net income was $32.4 million ($1.09 per diluted share) on sales of $1.21 billion down from the year-ago $49.4 million ($1.56 per share) and $1.31 billion, respectively. The Rail segment was the major bright spot for the company during the quarter, with those operating earnings moving up to $21.7 million from the year-ago $6.7 million.

Six-month Plant Nutrient income was $19.3 million on sales of $511.1 million, down from the year-ago $27 million and $506.2 million. Company-wide net income was $36.3 million ($1.23 per share) on sales of $2.16 billion, down from the year-ago $75.4 million ($2.36 per share) and $2.31 billion.

CF Industries Holding Inc. reported a 13 percent uptick in second-quarter net income to $351.9 million ($1.49 per diluted share) on net sales of $1.31 billion from the year-ago $312.6 million ($1.22 per share) and $1.47 billion, respectively. Nitrogen volumes were off at 3.61 million st from the year-ago 3.79 million st.

"Solid execution by our sales team and in our production facilities and distribution network led to the strong results for the quarter," said Tony Will, CF president and CEO. "Our financial results for the first half of 2015 demonstrate the sustainability of our cash generation capacity, even in a supply-driven, competitive global market."

Six-month income lagged by 43 percent at $582.5 million ($2.44 per share) on sales of $2.26 billion from the year-ago $1.02 billion ($3.85 per share) and $2.6 billion, respectively. Six-month volumes were 6.52 million st, down from 6.81 million st.

OCI NV and CF Industries Holdings Inc. today announced that they have entered into a definitive agreement to combine OCI’s North American, European and Global Distribution businesses with CF’s global assets in a transaction valued at approximately US$ 8 billion, based on CF’s current share price, including the assumption of approximately US$ 1.95 billion in net debt. Upon completion of the transaction and based on current share prices, OCI will receive shares equal to a fixed 25.6 percent of the combined group and an additional US$1,208 million of consideration to be paid in a mix of cash and shares. Greg Heckman, currently a member of the board of directors of OCI and former president and CEO of The Gavilon Group LLC and Alan Heuberger, senior manager at Bill & Melinda Gates Investments (BMGI), will join the board of directors of the combined entity. The proposed transaction was unanimously approved by the boards of both companies, but will still require shareholder approval. It is expected to close in 2016.

A merged CF Industries Holding Inc. and OCI NV will have its headquarters in the U.K. CF will become a subsidiary of a new holding company domiciled in the U.K. where CF is the largest fertilizer producer following its recent acquisition of GrowHow.

The transaction includes OCI’s nitrogen production facilities in Geleen, Netherlands, and Wever, Iowa, and the company’s interest in an ammonia and methanol complex in Beaumont, Texas, along with its global distribution business based in Dubai, United Arab Emirates. The combined entity will also purchase a 45 percent interest plus an option to acquire the remaining interest in OCI’s Natgasoline project in Texas, which upon completion in 2017 will be one of the world’s largest methanol facilities. On a combined basis the company will have production capacity of approximately 12 million nitrogen-equivalent nutrient tons by mid-year 2016.

Not mentioned in the OCI and CF press releases were OCI assets in Egypt and Algeria.

"This is a terrific opportunity for the shareholders of both companies, with mid- to high-teens cash flow accretion," said Tony Will, CF president and CEO. "This is also a great outcome for U.S. farmers as we have another supply point that will ensure our critical products are delivered reliably and in-time to meet our customers’ needs."

"Combining our businesses with CF builds upon the company’s platform in Europe and expansive distribution network in North America, enhancing our collective scale and improving our ability to meet the needs of customers in the U.S. and around the world," said Nassef Sawiris, OCI CEO "As significant owners in the combined entity, our shareholders will benefit from the ongoing value creation of the business."

Agrium Inc. reported a 10 percent uptick in second quarter net income to $675 million ($4.71 per diluted share) on sales of $7 billion, up from the year-ago $616 million ($4.28 per share) and $7.3 billion, respectively.

"Agrium’s solid second quarter earnings were supported by the strong competitive advantages across our product portfolio, the diversity of our product and geographic mix and our continued focus on operational excellence,” said Chuck Magro, Agrium president and CEO. “Wholesale delivered impressive results across all products, supported by lower costs and higher volumes. Retail earnings held up well despite approximately a 5 percent decline in crop input expenditures across the North America market and the impact of the severe weather conditions across this region. We believe we outperformed against our U.S. retail peers achieving an increase in U.S. normalized comparable store sales in a down market, a demonstration of the strength of our business model and market position."

Six-month net earnings were up 11 percent to $689 million ($4.78 per share) on sales of $9.9 billion compared to the year-ago $619 million ($4.29 per share) and $10.4 billion.

Agrium Inc. said today that it has changed its plans with respect to its Borger, Texas, expansion. While the company will continue with the 610,000 mt/y urea facility, it has opted against a 145,000 mt/y ammonia debottleneck. "We have decided not to expand the existing ammonia plant given the high cost and the significantly longer downtime required to complete this portion of the project than was originally planned," Agrium President and CEO Chuck Magro told analysts today. The company anticipates completion of an ammonia facility refresh in the first quarter of 2016 and expects the urea plant to be mechanically complete by the end of 2016. Agrium said the CAPEX for the project remains within 5 percent of the original $720 million estimate. 

About 1 million mt of urea from the Black Sea, China and Iran will soon be heading to India under the MMTC tender that closed last week. The Indian buying house counterbid at US$284.44/mt CFR for East Coast ports and $288.40/mt CFR for West Coast ports. Awards have already been issued to cover 780,000 mt to nine companies. An additional 200-250,000 mt is expected to be awarded by the end of the week. Details of the tender results will be found in the Aug. 10 issue of Green Markets.