PotashCorp says its merger with Agrium — the parent company of Crop Production Services — is still on track to close by the middle of this year.
“The regulatory review and integration processes are advancing, and we expect the transaction will close mid-2017,” said PotashCorp president and CEO Jochen Tilk, discussing the company’s 2016 year-end financial report on Thursday.
The new Canadian fertilizer company, which has yet to be named, would be worth around US$36 billion, with close to 20,000 employees and operations in 18 countries.
“Our board and management team look forward to the opportunity to deliver significant value for our shareholders through this transaction, including up to $500 million of annual operating synergies,” he continued.
The new business would have capacity to produce approximately 19 million tonnes of potash, 8 million tonnes of nitrogen and 3 million tonnes of phosphorous fertilizer annually, while operating more than 1,400 retail locations, according to a presentation made to shareholders last fall. Its head office would be in Saskatoon, where PotashCorp has its headquarters. A corporate office would also be located in Calgary, where Agrium is based.
As for the annual report, PotashCorp has a positive outlook for potash revenues, with challenges expected in the phosphate market.
“Strong customer engagement and positive potash pricing trends from the second half of 2016 are expected to carry into the new year,” said Tilk. “Supported by healthy underlying consumption, lower global inventories and with Canpotex fully committed for the first quarter of 2017, we see a continued potash recovery. Balancing this constructive market view is a more cautious second-half outlook for our nitrogen earnings and expected challenges for our phosphate results.”
Related: Agrium, PotashCorp Agree to Merge