The Canadian Competition Bureau (CCB) on Sept. 11 granted unconditional regulatory approval for the proposed merger of equals by Potash Corp. of Saskatchewan Inc. and Agrium Inc. by issuing a no-action letter. The issuance of the letter satisfies the Canadian regulatory condition of the closing of the proposed merger.
The CCB concluded that the proposed transaction is not likely to lead to a substantial lessening or prevention of competition with respect to potash fertilizer, phosphate fertilizers, and nitric acid. The CCB found that global prices of potash are correlated with prices in Canada, and that customers can source potash from multiple suppliers.
The companies previously received unconditional clearance for the merger in both Brazil and Russia. The regulatory review and approval process continues in the U.S., China, and India, and the parties expect to close the transaction by the end of the fourth quarter of 2017.
The U.S. has posed concerns over nitric acid and super phosphoric acid. India and China are interested in PotashCorp shedding offshore minority stakes (GM Sept. 8, p. 1). Those include 28 percent of Arab Potash Co., 32 percent of Chile’s Sociedad Quimica y Minera de Chile SA (SQM), 14 percent of Israel Chemicals Ltd. (ICL), and 22 percent of Sinofert Holdings, the largest fertilizer import and distributor in China, and one of its largest fertilizer manufacturers.
The market value of these four investments was $4.8 billion, or $6 per PotashCorp share, as of market close July 26, 2017. ICL shares fell sharply Sept. 10 on the Tel Aviv Stock Exchange in response to reports that PotashCorp may have to sell off its stake. The share price partially recovered, but still closed down nearly 1 percent for the week.
Upon closing the merger transaction, the new company will be named Nutrien and will be the largest global provider of crop inputs and services.