The Federal Trade Commission on Dec. 23 reported that Agrium Inc. has agreed to sell some fertilizer assets to settle antitrust issues regarding its $5.2 billion bid to acquire CF Industries Holdings Inc. Agrium had already reported that the shedding of some assets would be required (GM Nov. 23, 2009), as well as the sale of one-half of its Carseland, Alberta, nitrogen facility, in order to satisfy Canadian regulators (GM Oct. 26, 2009).
The proposed consent order states that should the Agrium/CF deal be concluded, Agrium must then divest itself of the CF anhydrous ammonia terminal at Ritzville, Wash., and another terminal in Marseille, Ill. The order identifies Terra Industries Inc. as the FTC-approved buyer of those terminals, and states the divestiture must be completed within 45 days of the Agrium-CF acquisition date.
The order states that Agrium must also give up its exclusive rights to market the anhydrous ammonia produced at the Rentech Inc. plant in East Dubuque, Ill. Rentech will receive the rights to market the ammonia produced at its own plant.
“Each of these markets is highly concentrated,” the FTC said, “and the proposed transaction would further increase concentration levels by reducing the number of significant competitors in the Pacific Northwest from two to one, and in the two areas in Illinois from three to two.”
Under the consent order with the FTC, Agrium also agreed to give antitrust regulators advance written notice if it plans to buy an interest in any anhydrous ammonia assets during the coming 10 years.
The order is subject to public comment for 30 days before the FTC decides whether to finalize it.
Agrium said the remedies under the consent agreement are not material to the proposed Agrium/CF deal, and noted that all necessary approvals under the Hart-Scott-Rodino Antitrust Improvements Act have now been obtained.
Agrium also announced on Dec. 21 that it has extended the expiration date of its offer to acquire CF for $45 in cash plus one Agrium share per CF share until 12:00 midnight, New York City time, on Jan. 22, 2010. Agrium said it has replaced its financing commitments with “highly confident” letters from Royal Bank of Canada and the Bank of Nova Scotia. Agrium said its offer for CF is now conditioned on Agrium having available to it proceeds of financing that are sufficient, together with cash on hand, to purchase all outstanding shares of common stock of CF and to pay the related expenses.
“We remain committed to acquiring CF and continue to question how the CF board can justify not even responding to our December 2nd letter,” said Mike Wilson, Agrium president and CEO. “We and our financial advisors are confident that if we are successful in our pursuit of CF, we will be able to obtain financing on satisfactory terms without any delay in consummating the transaction. Agrium appreciates the continued support of the CF stockholders as evidenced by the stock tendered on Dec. 18, 2009. It is clear they would prefer to receive a premium versus pay a premium.”
As previously announced, Agrium says it will nominate two directors to stand for election at CF’s 2010 annual meeting.
CF on Dec. 21 responded by saying Agrium’s offer is “further away from being compelling than it ever has been.”