Potash Corp-Agrium Merger to be Named 'Nutrien' Post Closure

Canadian fertilizer makers, Potash Corp. POT and Agrium AGU said yesterday that once their proposed merger transaction completes, the combined entity will be called "Nutrien".

The companies also noted that the regulatory review and approval process for the deal is continuing and the merger transaction is expected to complete in the third quarter of 2017.

Potash Corp. and Agrium, in Sep 2016, agreed to merge their businesses to create a fertilizer powerhouse with a pro forma enterprise value of $36 billion. The merger will create the world's largest crop nutrient supplier and the integrated company will be better placed to counter headwinds in the crop nutrient markets. The combined entity would have around 20,000 employees, operations and investments across 18 countries.

The combined company will also be better positioned to serve customers and growers with low-cost, high-value products and services and complementary assets. It will also have the lowest-cost potash production assets and reserves in North America, a balanced portfolio of nutrients and a leading retail distribution platform.

Moreover, the new company will have a strong balance sheet with considerable cash flows, providing it ample flexibility to return excess capital to shareholders and invest in growth while retaining a strong investment grade credit rating profile.

The integrated company is expected to generate as much as $500 million of annual operating synergies. Roughly $250 million of these synergies are expected to be achieved by the end of the first year, following the completion of the transaction.

Potash Corp.'s shares have lost 4% over the past three months, outperforming the Zacks categorized Fertilizers industry's decline of 9.1%.

Potash Corp. is expected to benefit from improving demand for potash. The company sees an improved environment this year with higher expected demand for potash across key consumer markets. It expects consistent customer engagement through 2017, supported by healthy consumption trends.

Potash Corp. is a Zacks Rank #1 (Strong Buy) stock.

Potash Corporation of Saskatchewan Inc. Price and Consensus

 

Potash Corporation of Saskatchewan Inc. Price and Consensus | Potash Corporation of Saskatchewan Inc. Quote

Other Stocks to Consider

Other top-ranked stocks in the basic materials space include Huntsman Corporation HUN and Kronos Worldwide, Inc. KRO, both sporting a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth of 7%.

Kronos has an expected long-term earnings growth of 5%.

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