While pharma megamergers have been grabbing the headlines lately, another fertile area for mergers and acquisitions is among the producers of plant nutrients. Problem is, no one's biting.

CF Industries (NYSE:CF) is pursuing Terra Industries (NYSE:TRA), while Agrium (NYSE:AGU) is chasing CF. But the takeover targets are having none of it.

Since CF has decided to take the matter to shareholders with an exchange offer, Terra has to make its case for remaining independent. Setting aside the strange assertion that CF's offer is an "illusory proposal," here are some of the board's key arguments against a merger:

  • Terra's shift toward urea ammonium nitrate (UAN), which commands a premium over ammonia, would be undone.
  • The firm would lose the geographic advantages derived from both its inland plants (located away from the highly competitive Gulf Coast) and its low-cost natural gas supply from Trinidad (a locale also favored by PotashCorp (NYSE:POT)).
  • CF lacks experience integrating major acquisitions, and its synergy estimates aren't convincing or compelling.

Terra also branded the move as "opportunistic." Where else have I heard that one? Oh right, CF's rejection of Agrium's offer yesterday.

Of course these moves are opportunistic! We're not talking about Blackstone (NYSE:BX) buying Equity Office Properties at the top of the real estate bubble here. Smart M&A is made in times of dislocation, not euphoria.

CF didn't have much more to say to Agrium in its brief letter, but we'll surely see further PR skirmishes as Agrium presses on with its own exchange offer. Stay tuned, Fools -- this one's going to get fierce.

Agrium is a Fool favorite, judging by its five-star ranking over in Motley Fool CAPS. Weigh in on the firm's prospects, with or without a CF tie-up, right over here.

Fool contributor Toby Shute gets busy in CAPS under the name TMFSmashy, but he doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.