Agrium Launches Bid to Buy CF Industries

Proposed deal comes as CF ramps up bid to buy Terra, as turmoil in fertilizer industry continues.

Published on: Feb 25, 2009

CF Industries, which launched a bid to buy rival Terra last month, has itself become the target of a takeover attempt, as Agrium today announced it sought to purchase the Illinois-based fertilizer company. The Agrium-CF deal would require CF to drop its effort to buy Terra.

In disclosing its attempt, Agrium, based in Canada, said it was moving because CF recently intensified its effort to buy Terra, after that firm declined to back the deal. CF on Monday said it sought to replace three of Terra’s directors and was beginning its offer to buy Terra stock from shareholders.

“While we would have preferred to approach you privately, we concluded that given your recent unsolicited proposal to acquire Terra, it was imperative to act now to ensure that CF stockholders have an opportunity to consider our proposal – one that is clearly a superior alternative – prior to you reaching any agreement with Terra,” the company said in a letter to CF. Argium also said it had discussed combining the companies before CF went public in 2005.

The proposed deal would be worth $3.6 billion in cash and stock, creating a company with revenues of $14 billion, Agrium said.

The new bid is likely to raise even more eyebrows in Washington, where some in Congress have voiced alarm at the volatility in fertilizer prices. CF Industries apparently sought to blunt that criticism by posting a letter from the Federal Trade Commission on its Website that said the big spike in prices last fall was not the result of concentration in the industry.