Two Canadian firms, Potash Corp. and Agrium Inc., announced that they will merge, creating the world’s largest crop-nutrient company, according to The Associated Press. The new company will have 20,000 employees, a market value of $36 billion and annual revenue of $20.6 billion. A name will be chosen before the deal closes next year, said the AP.
The deal still must be reviewed by both Canadian and U.S. governments, but Bloomberg has reported that analysts think the merger will pass muster because there is little overlap in the assets of the two companies. “Potash Corp. is essentially a mining company, extracting potash from below ground and processing the commodity, Agrium got 77 percent of its revenue last year from its farm-retail business,” says Bloomberg.
The new company would have “more than 46 percent of North American potash production volume, according to Bloomberg Intelligence, as well as strong positions in both phosphate and nitrogen fertilizers.”
The merger will not change things much for customers of the two companies outside of North America. “Both companies, along with U.S. producer Mosaic Co., already operate a joint venture that handles their exports,” says Bloomberg. “That means any deal shouldn’t pose harm to competition.”