Agrium makes $3.6B offer for CF Industries

Agrium makes $3.6 billion cash-and-stock offer for CF Industries, seeks to thwart Terra deal

NEW YORK (AP) -- Agricultural products company Agrium on Wednesday offered $3.6 billion in cash and stock to buy CF Industries Holdings Inc. to expand its fertilizer business.
The offer comes about a month after CF Industries offered $2.1 billion to buy Terra Industries Inc.

"Adding CF's strong North American nitrogen, phosphate and extensive crop nutrient distribution assets to Agrium's broader global wholesale and retail capabilities would greatly enhance our existing portfolio and enable us to create a premier global franchise across the entire agricultural value chain," said Mike Wilson, Agrium's president and chief executive.

Deerfield, Ill.-based CF Industries said in a statement it has received the offer and will evaluate it carefully.

CF Industries made an all-stock offer for Terra Industries of Sioux City, Iowa, on Jan. 15. Under the proposal, Terra Industries shareholders would have received 0.4235 of a CF Industries share for each Terra share held.

Terra Industries' board unanimously rejected the offer, saying the bid was not in the best interest of the company or its shareholders because it undervalued Terra. But CF Industries said it remains unwavering in its support of the deal and on Monday launched an exchange offer for Terra.

Wednesday, Agrium said it is offering CF Industries shareholders $76 per share, a 37 percent premium over the company's $55.58 closing price Tuesday. Each CF share would be swapped for one Agrium share and $31.70 cash under the proposed terms.

The acquisition is not subject to a financing condition, Agrium said, noting it has sufficient cash resources and committed financing underwritten by Royal Bank of Canada and The Bank of Nova Scotia to fund the offer's cash portion.

The funding portion is noteworthy given the current tattered state of the credit markets.

Agrium says it expects the combined company to have revenue of nearly $14 billion and noted the transaction offers shareholders of CF Industries annual savings of $150 million, better than the proposed deal with Terra Industries.

The Calgary, Alberta-based company says its proposal is conditioned on CF terminating its pursuit of Terra.

Shares of CF Industries rose $6.19, or 11.1 percent to $61.77, while Agrium shares fell $3.73, or 9.3 percent, to close at $36.57. Terra shares shed 97 cents, or 3.9 percent, to $23.85.