CALGARY — Agrium Inc. (TSX:AGU) has agreed to sell two U.S. fertilizer terminals, allowing the Calgary-based fertilizer giant to clear a key regulatory hurdle in its dogged quest to buy U.S. rival CF Industries Holdings Inc. (NYSE:CF).
“With the receipt of all necessary regulatory approvals to acquire CF, the only remaining impediment to conclude this mutually beneficial transaction is the continued refusal of the CF board to meet with us,” Mike Wilson, Agrium president and CEO, said in a statement Wednesday.
“Agrium remains committed to acquiring CF and will continue its efforts to achieve the combination between Agrium and CF, which would benefit the stockholders of both companies.”
The U.S. Federal Trade Commission announced earlier Wednesday that Agrium has agreed to sell CF’s Ritzville fertilizer terminal in the Pacific Northwest and its own Marseilles terminal in northern Illinois if the CF takeover is consummated.
Agrium would also give up rights to market a certain type of nitrogen fertilizer produced for it by Rentech at a manufacturing plant in East Dubuque, Ill.
The FTC said the settlement with Agrium would allay concerns that a CF takeover would eliminate competition in the market for anhydrous ammonia, a gaseous fertilizer that provides nitrogen to the soil to enhance growth of corn, beans and other crops.
Anhydrous ammonia, which is stored and transported in liquid form in high-pressure canisters, can be hazardous or even fatal if sufficient amounts are breathed.
The FTC said Agrium would be responsible for the anhydrous ammonia terminals covered by the settlement during any transition period until they can be divested.
While the FTC settlement gives Agrium another bargaining chip, there’s no certainty it will be able to buy CF Industries.
Agrium is offering CF US$45 in cash plus one Agrium share. Based on the Wednesday afternoon price for Agrium’s shares on the New York Stock Exchange, its cash and stock offer was worth about US$108 per CF share.