CF Industries buying stake in Canadian Fertilizers

DEERFIELD, Ill. (AP) -- Fertilizer maker CF Industries Holdings Inc. has a deal with Glencore International PLC to buy a stake in Canadian Fertilizers Ltd. owned by a Glencore division.

CF Industries will pay 915 million Canadian dollars, or about $912.2 million, for 34 percent of Canadian Fertilizers' outstanding preferred and common stock as well as a product-purchase agreement. Canadian Fertilizers owns the largest nitrogen fertilizer complex in Canada, in Medicine Hat, Alberta, according to CF Industries.

As a result of the deal announced late Thursday, CF Industries will have the right to buy 100 percent of Canadian Fertilizers' ammonia and urea production.

Fertilizer companies have benefitted from the drought gripping much of the U.S. farm belt, which is expected to shrink the corn and soybean harvest this year and has driven up grain prices. Farmers will need fertilizer to help feed the failing crops, and demand is expected to surge.

The drought is the worst in the U.S. in a quarter-century.

CF Industries, based in Deerfield, Ill., has operated the complex in Medicine Hat for more than 35 years. CF Industries Chairman and CEO Stephen Wilson called the acquisition "a low-risk expansion of our nitrogen supply capability."

The stake in Canadian Fertilizers that the company is acquiring is owned by Viterra Inc., Canada's biggest grain handling company. Glencore, a big Swiss-based commodities trading firm, is buying Viterra in a deal valued at about $6.14 billion.

The Canadian government gave its approval last month for the proposed acquisition. Glencore still needs approval from the Commerce Ministry in China, where Viterra has operations, and from New Zealand and Australia.

CF Industries shares rose $7.63, or 4 percent, to close at $202.02.