Agrium, PotashCorp merger will 'impact the entire industry,' including thousands of farmers: prof.
Merger to form Nutrien, world's largest nutrient company, slated to close Jan. 1
A mammoth merger between the world's largest potash producer and a major agricultural and chemical company is slated to close Jan. 1.
The merger between PotashCorp and Agrium — which will combine to make Nutrien — received its final clearance on Wednesday. The planned merger was first announced on Sept. 12, 2016.
Trade commission approves merger
The United States Federal Trade Commission approved the merger Wednesday, meaning the transaction is meant to finish up on Jan. 1, 2018. The next day Nutrien — NTR on the Toronto and New York stock exchanges — is expected to start trading publicly.
"This final clearance marks a significant milestone in bringing two industry leaders together," said Chuck Magro, president and CEO of Agrium, in a news release.
Nutrien will be the world's largest nutrient company and the third-largest natural resource company in Canada. Post-merger, approximately 20,000 people will work for the company in 18 countries, with the entire enterprise valued at $36 billion USD.
Prof. says merger will 'impact entire industry'
"It's not surprising to see authorities approve this mega deal — $36 billion. It's a significant transaction which will impact the entire industry," said Sylvain Charlebois, the dean of the faculty of management at Dalhousie University.
Charlebois said producers have "every right" to be concerned about the changes.
"It's one less option for them," he said. "Historically, when we see these kinds of transactions, input costs tend to rise, which is certainly bad news for farmers."
The move will impact "hundreds of thousands of farmers" in Canada, particularly as they start to shop around for products like fertilizer and seeds in the new year, he said.
"They may actually start feeling the impact of this transaction right in 2018," he said, adding that he thinks both companies plan to start implementing changes as soon as possible.
Charlebois said the move makes sense business-wise because of the nature of the industry.
"Companies can't just compete on one continent or in a region. They have to think globally."
Nutrien to operate 6 Sask. potash mines
The company will also operate six of Saskatchewan's 10 potash mines. Headquarters for the new company will be in Saskatoon, with corporate offices also existing in Calgary.
According to PotashCorp, the amalgamation will save both companies up to $500 million USD post-merger. PotashCorp shareholders will own 52 per cent of Nutrien, while Agrium shareholders will own 48 per cent.
PotashCorp was initially a Saskatchewan Crown corporation. The provincial government privatized it in 1989, and it went on buy several other potash producers. The company was worth $17.74 billion USD as of 2016.
With files from Carl Sincennes