February 17, 2010
Norway's fertiliser maker to buy Terra
Norwegian fertiliser producer, Yara International, agreed on Monday (Feb 15) to buy Iowa-based Terra Industries for US$4.1 billion to increase its presence in the US.
Last month CF Industries Holdings withdrew its year-long hostile bid to buy Terra. CF Industries is facing its own hostile bid from Agrium of Canada.
Analysts and producers expect a major rebound in the demand for fertilisers this year as farmers rush to replenish their soil nutrient levels, which could lead to more mergers or acquisitions.
The chief executive of Yara, Joergen Ole Haslestad, said on Monday that the all-cash acquisition of Terra ''will create a clear global No. 1 in the fertiliser industry.''
Yara's offer values Terra at US$41.1 a share and represents a premium of 23.6% compared with Friday's (Feb 12) closing price.
The enlarged company will have about 30% share in the US
fertiliser market and a 8% global market share. Yara said it expected some US$60 million annual savings from the deal.
The chief executive of Terra, Michael L. Bennett will become an executive vice president of Yara and head the Norwegian company's North America division.