After more than a year of endless takeover approaches and demurrals among several fertilizer players, two have finally cut a mutually satisfactory deal. On Monday, Yara International agreed to buy Terra Industries
One unnamed analyst was cited in the Canadian press as saying that Norway's Yara "is not bottom-ticking the market here, in terms of price." Indeed, this offer is a long way from CF Industries'
This isn't even the first major piece of M&A we've seen in the fertilizer market this year. Vale
I would be quite surprised if Agrium didn't seal the deal over the next six months or so. All of the company's public comments, including those surrounding the Yara deal, point to dogged pursuit.
The logic of these combinations is pretty compelling, and familiar to anyone who remembers the oil and base metal megamergers that gave us companies like ConocoPhillips and Teck Resources. As I said when the nitrogen bomb first hit Wall Street, "fertilizer is yet another extractive industry in which a global footprint has its allure."
Compared to a Vale takeover of Mosaic