- Merger talks between Potash Corp. (POT +0.1%) and Agrium (AGU -0.3%) are in an early stage and a potential deal is "weeks" away, CNBC's Marc Faber reports; Bloomberg's initial report yesterday said a deal could be announced as soon as next week.
- POT shares are little changed today after rallying yesterday to their biggest one-day gain in more than six years, and the VanEck Vectors Agribusiness ETF (NYSEARCA:MOO) enjoyed its most active session since September; POT and AGU each make up ~4% of the VackEck ETF’s holdings.
- Edward Jones analyst Dan Sherman is optimistic about the long-term outlook for potash and likes the merger idea, saying AGU’s retail business would provide diversification to cushion POT from the next commodities downturn, and that "if you believe potash prices are stabilizing, they’re sitting at the bargaining table in about equal positions."
- However, Morningstar's Jeffrey Stafford says "opportunities for cost synergies make sense to us, but we have a harder time justifying the market optimism [as] the opportunity for [potash] price hikes are limited."
- Other relevant ETFs: PAGG, VEGI, SOIL