Topic: How To Invest

The Successful Investor Hotline – Friday, September 2, 2016

Article Excerpt

AGRIUM INC., $127.63, Toronto symbol AGU, and POTASH CORP. OF SASKATCHEWAN, $23.36, Toronto symbol POT, both jumped this week on news they’re in merger talks. Agrium gets most of its revenue and earnings from selling seeds, fertilizers and other agricultural products to farmers through 1,400 stores in North America, South America and Australia. It also mines potash and produces nitrogen- and phosphate-based fertilizers. Potash Corp. is one of the world’s leading producers of potash fertilizer. Its other products include phosphate- and nitrogen-based (from natural gas) fertilizers. A merger would help both firms cope with weak fertilizer demand and prices. It would also help them compete with larger potash producers in Russia and Belarus. While the companies have yet to announce any details, any merger agreement would likely be an all-stock deal: both Agrium and Potash investors would swap their holdings for shares in the new, combined company. A merger would likely face strong regulatory hurdles. That could require the combined company to sell certain operations. OUR…