Jan 18 2009
CF Industries Holdings, Inc. (NYSE: CF) announced that it has proposed to acquire all of the outstanding common shares of Terra Industries Inc. (NYSE: TRA), in a transaction that would create a leader in the global fertilizer industry.
CF Industries' Board of Directors has approved a proposal under which each common share of Terra would be entitled to receive 0.4235 shares of CF Industries. The proposal represents a premium of 34% based on the 30-day volume weighted average prices for the shares of the two companies, and a 29% premium based on the 10-day volume weighted average. The proposal also represents a 23% premium over the closing price of Terra shares on January 15, 2009. The transaction values Terra Industries at $2.1 billion.
"The combination of CF Industries with Terra will create a leading fertilizer producer with enhanced ability to compete globally," said Stephen R. Wilson, chairman, president and chief executive officer of CF Industries. "North America is an attractive agribusiness market with an ongoing need for strong global players domiciled here. We believe that the companies together will form a stronger, more competitive global player that can service more customers, more efficiently."
On a pro-forma basis, the combined company will be the largest nitrogen producer in the world among publicly traded companies as measured by production capacity. The companies' complementary footprints will safeguard operating jobs, while increasing geographic reach in the important U.S. grain belt as well as expanding sourcing from international locations. CF Industries and Terra together will create a more stable platform for future growth, enhancing the viability and continuity of the North American nitrogen production industry, which has seen rising imports in recent years. Together, CF Industries and Terra would be better positioned for growth with a stronger balance sheet, increased flexibility to access the capital markets, and the enhanced ability to weather difficult market conditions.