Agrium is the better choice ahead of merger

Article Excerpt

Canadian regulators recently approved the proposed merger of Agrium and Potash Corp. of Saskatchewan. Other countries still need to approve the deal, but the companies expect to complete the transaction by the end of 2017. Under the terms of the agreement, Potash Corp. investors will receive 0.40 shares in Nutrien (the name chosen for the combined company) for each POT share they hold; Agrium investors will receive 2.23 shares for each of their AGU shares. After the merger, Potash Corp. investors will hold 52% of the new company, with Agrium shareholders owning 48%. Given its strong retail business, we prefer Agrium for new buying. If the merger ultimately fails, those stores will help to shield the company from volatile fertilizer prices. AGRIUM INC. $133 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 138.2 million; Market cap: $18.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.3%; TSINetwork Rating: Average; www.agrium.com) sells seeds, fertilizers and agricultural products to farmers through 1,500 stores…

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