Talks set to create global fertiliser giant worth $27 billion

Reports in the business world are hinting at the creation of a global fertiliser giant with the potential merger of major players in the fertiliser market Norway’s Yara and Chicago-based CF Industries.

Should the deal go through it could create a $27 billion global fertiliser producer to rivalling Canada’s Potash Corp.

Reports highlight that the merger would give Yara world’s biggest nitrate fertiliser maker, major production units in the United States, where costs are lower due to cheap gas. On the other side CF Industries would gain a global footprint through Yara’s presence in 150 countries with production assets and a well established distribution network.

The two firms’ combined market capitalisation of $27.5 billion would put it almost on par with Potash Corp, the world’ largest fertiliser company worth $28.9 billion.

Yesterday (Tuesday) on hearing the reports Yara’s shares surged nearly 9%.

According to the AHDB, the key factors that influence fertiliser markets suggest that fertiliser prices will remain bearish in the long term.

It says bullish supply and demand pressures look to slightly outweigh bearish influences in most nutrient markets in the short term.

However, it also notes that falling cereal and oilseed prices have not yet disincentivised the use of most fertilisers but the impact in coming months is unclear. Anticipated capacity development projects into 2018 could put longer term downward pressure on prices, subject to these being completed.