Fri, Nov. 4, 1:10 AM
Thu, Nov. 3, 4:47 PM
- Agrium (NYSE:AGU) and Potash Corp. (NYSE:POT) shareholders have overwhelmingly approved the merger of the two fertilizer producers, as expected.
- More than 99% of POT shareholders and 98% of AGU shareholders voted in favor of the deal, the companies said at separate meetings.
- Michael Underhill, chief investment officer of Capital Innovations, which owned shares in both companies, had said it liked the merger because it provides scale and diversification to weather a slumping market.
Thu, Nov. 3, 10:49 AM
- Agrium (AGU -1.4%) is lower after reporting a surprise Q3 loss and cutting its full-year profit forecast, as it copes with ongoing weakness in crop nutrient prices and slumping demand.
- AGU reported an adjusted Q3 loss of $17M, or $0.12/share, far below analyst expectations for an $0.11 profit, although the latest results included $17M in costs related to the proposed merger with Potash Corp., plus legal settlements and fees totaling $18M; Q3 revenues fell 11% Y/Y to $2.25B.
- AGU says Q3 crop nutrient sales fell 14% Y/Y and crop protection product sales fell 5%, as realized selling prices for potash fell sharply.
- AGU also cuts its FY 2016 EPS guidance to $4.60-$5.00 from the prior outlook of $5.00-$5.30
- In September, AGU and POT agreed to merge in an all-stock deal that will allow POT shareholders to own 52% of the new company; shareholders of both companies are scheduled to wrap up voting later today and are expected to back the merger.
Wed, Nov. 2, 5:30 PM
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Thu, Oct. 27, 9:58 AM
- Potash Corp. (POT +0.3%) opens slightly higher after reporting better than expected Q3 earnings and revenues but well below last year's levels, as the slump in fertilizer nutrient prices outweighed improved volumes.
- The beat was due to lower than expected taxes, and investors may be disappointed with results given that potash spot prices recently have increased, Citi analyst P.J. Juvekar says.
- POT says Q3 potash sales volumes hit a record and spot prices rose ~15% from lows earlier in the year, but potash prices were still ~40% lower Y/Y, offsetting record potash sales volumes of 2.5M metric tons, a 16% Y/Y gain; prices for nitrogen and phosphate also were much lower than a year ago.
- POT lowers the top end of earnings guidance for FY 2016, now seeing EPS of $0.40-$0.45 from prior $0.40-$0.55 and $0.51 analyst consensus estimate.
- On its planned merger with Agrium (AGU +0.2%), POT says support from shareholders to date "has been very encouraging."
Thu, Oct. 20, 4:47 PM
- Investor advisory company Glass Lewis recommends that Agrium (NYSE:AGU) and Potash Corp. (NYSE:POT) shareholders support a proposed merger, saying it would create a bigger, more diversified company.
- Last week, ISS also recommended support for the merger from investors in each company.
- AGU and POT are each holding their own shareholder meetings on Nov. 3 to vote deal, which requires two-thirds approval by shareholders of each company; POT shareholders would own 52% of the new company.
Tue, Sep. 20, 12:41 PM
- Weakness in the crop and fertilizer markets may not have hit rock bottom yet, meaning that now is the right time to merge leading farm input suppliers, Agrium (AGU +1.7%) CEO Chuck Magro says in making a pitch to skeptical investors for a merger with Potash Corp. (POT +0.7%)
- "Are we at the bottom yet? We don't know. We know there's more upside than downside. This is the time in the cycle where it makes sense to do mergers and acquisitions," Magro says.
- The deal would combine POT's crop nutrient production capacity with AGU's farm retail network, and some AGU investors worry that the merger would leave them with greater exposure to the weak potash market.
- U.S. prices of potash, urea and phosphate fertilizers, as well as corn and soybean values, are well below five- and 10-year averages, the two companies say in a joint presentation at a Scotiabank investor conference in Toronto.
- Rival fertilizer producer Mosaic (MOS +0.3%), which would be dwarfed by the merged AGU-POT, also is considering acquisition options, CFO Rich Mack says at the conference.
Thu, Sep. 15, 5:58 PM
- Agrium (NYSE:AGU) execs plans to meet with reluctant shareholders next week in Toronto to support its proposed merger with Potash Corp. (NYSE:POT), seeking to ease concerns that the new company would be too linked to the crop nutrient potash, which has fallen this year to decade lows on oversupply and tumbling crop prices.
- AGU shareholders generally dislike the deal; shares slumped 6% from Monday's deal announcement to yesterday before bouncing a bit today.
- AGU's farm retail business, currently worth 48% of EBITDA, would account for just 19% of the new company, a level that dismays some shareholders.
- To be sure, some shareholders like the idea of creating a crop nutrient champion with nearly 3x the enterprise value of the next biggest fertilizer company.
Mon, Sep. 12, 6:10 PM
- Potash Corp. (NYSE:POT) and Agrium (NYSE:AGU) both finished lower in today's trade after Canada’s two largest fertilizer producers agreed to an all-share merger to create a company that would control nearly two-thirds of North American potash capacity and almost one-third of phosphate and nitrogen capacity there; POT closed -1.2% while AGU finished -2.7%.
- AGU CEO Chuck Magro, who will be CEO of the merged company, and POT CEO Jochen Tilk, who will become executive chairman, say they are confident that the deal will receive regulators' approval as proposed, without the need for divestitures, but others are skeptical.
- "This deal has some real antitrust concerns," says former U.S. Department of Justice official Seth Bloom, who adds that an antitrust review is unlikely before January, when a new U.S. president takes office.
- The merger would leave Mosaic (NYSE:MOS) as North America's only other major potash producer; Bloomberg reports that AGU held early stage deal talks with MOS, but the talks fizzled out earlier this year and did not overlap with negotiations with POT.
Mon, Sep. 12, 7:23 AM
- Agrium (NYSE:AGU) and Potash Corp. (NYSE:POT) say they have agreed to combine in a merger of equals to create a fertilizer and farm retailing giant with pro forma enterprise value of $36B, including debt.
- In the all-stock deal, POT shareholders would receive 0.4 common share of the new company for each common share they own, and AGU shareholders would get 2.23 common shares of the new company for each common share they own.
- After the deal closes, POT shareholders will own ~52% of the new company, with AGU shareholders owing ~48%.
- The companies expect the combination to generate up to $500M of annual operating synergies primarily from distribution and retail integration, production and SG&A optimization, and procurement; synergies imply value creation for the combined enterprise of up to $5B.
Fri, Sep. 2, 7:05 PM
- A combination of Potash (POT +1%) and Agrium (AGU +1.6%) into a fertilizer giant may find a friendlier regulatory ear in the companies' home country of Canada than it would in the United States, competition lawyers say, but a U.S. rejection would kill the deal just the same.
- Canada's Competition Bureau may be kinder since its regulators focus more on the potential for achieving efficiencies of scale -- the better to strengthen companies usually already operating in a smaller market.
- But significant operations in the U.S. mean the FTC or Justice Dept. could take a harder line on what Potash/Agrium would mean for pricing power. Such a merger would consolidate 62% of North American potash production into one company and reduce the market largely to two companies overall.
- Earlier this year, Canadian regulators approved a deal between Superior Plus and Canexus on the efficiency argument, but U.S. denial scuttled the deal.
- Just yesterday, agricultural producers representative Norm Hall compared the situation to "the movie 'Mad Max' -- one company owns everything," suggesting they'd head to the Competition Bureau to oppose a deal.
Thu, Sep. 1, 7:22 AM
- "It's like the movie 'Mad Max,' - one company owns everything," says Agricultural Producers Association of Saskatchewan President Norm Hall. "There's less and less competition out there. We’re being painted into a box because of corporate greed."
- His group plans to head over to that country's Competition Bureau if current merger talks result in a deal. Other North American ag trade groups are planning on doing the same. The DOJ this week sued to stop Deere from buying Monsanto's Precision Planting farm equipment business, suggesting the groups are likely to find a friendly ear in regulators.
- A combination of Potash (NYSE:POT) and Agrium (NYSE:AGU) would consolidate 60% of North America's potash production with one company.
Wed, Aug. 31, 10:44 AM
- 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
Tue, Aug. 30, 12:37 PM
- Trading resumes in Potash Corp. (POT +10.4%) and Agrium (AGU +5.8%) after the fertilizer companies confirm they are in preliminary talks about a possible merger.
- At least one analyst thinks a POT-AGU combination would make no sense; Cowen's Amber Kanwar says both companies largely have completed their expansion plans, so a merger would not change the capex outcome in any meaningful way.
- Kanwar believes a merger would not substantially impact the market and continues to see excess capacity in potash, nitrogen and phosphate as an issue going forward.
Tue, Aug. 30, 11:57 AM
- Potash Corp. (POT +13.4%) and Agrium (AGU +7.9%) say they are in preliminary discussions regarding a potential merger of equals, confirming an earlier report; shares are halted again.
- The companies caution that no decision has been made and no agreement has been reached.
- Fertilizer producers have been hurt in recent years by depressed prices for crop nutrients amid a glut of supply and weak demand, and both companies have cut their 2016 earnings guidance.
- Before the trading halt, POT shares soared for their biggest gain in six years while AGU climbed more than 7%.
Tue, Aug. 30, 10:21 AM
- Potash Corp. (POT +12.3%) and Agrium (AGU +6.6%) resume trading after a halt for volatility following a Bloomberg report that the companies are in advanced merger talks.
- A combination reportedly could be announced as soon as next week, although no final decisions have been made.
- Related stocks also are ticking higher: MOS +7.3%, CF +4.4%, IPI +13.7%, SQM +3.1%, UAN +3.3%, TNH +2.3%, ICL +3.9%.