There’s a huge merger in the agriculture sector this morning.
Agrium and the Potash Corporation of Saskatchewan have agreed to merge.
The deal worth an estimated $36-billion US would bring together PotashCorp’s huge fertilizer mining operations–the world’s largest by capacity–with Calgary-based Agrium’s extensive global direct-to-farmer retail network. The companies say the new firm will have a new executive team, a plan to expand while achieving $500-million in annual cost savings and would have close to 20,000 employees in 18 countries.
News of the deal comes as the fertilizer industry struggles with a steep drop in prices in recent years following a ramp-up of production and the breakup of a Russia-Belarus potash trading cartel in 2013.
Analysts expect the combined company would be better able to control fertilizer output and may lead to mine closures.
No word yet what the name of the merged company will be.