Terra to buy interest in Agrium asset; Agrium extends offer for CF Industries to Nov. 13

By Lisa Kerner

Charlotte, N.C., Oct. 19 - Terra Industries Inc. agreed to buy a 50% interest in Agrium Inc.'s Carseland, Alta., nitrogen production assets and some U.S. assets for approximately $250 million.

Closing of the deal is contingent on Terra's raising of $600 million of debt capital and Agrium's completion of its proposed acquisition of CF Industries Holdings, Inc., an Agrium news release said.

"This transaction is consistent with Terra's pure-play nitrogen strategy, which distinguishes Terra from its competitors," Terra president and chief executive officer Michael Bennett said in a separate release.

"The transaction would be immediately accretive to Terra shareholders and we believe it is a solid opportunity to create shareholder value."

Agrium said it believes the agreement will address regulatory concerns under Canadian competition law in connection with its offer to acquire CF Industries.

Mike Wilson, Agrium's CEO, believes the Terra deal will allow Agrium to move forward with the acquisition of CF Industries and urged the company to begin "meaningful discussions" regarding the proposed acquisition.

Agrium extends offer

Agrium extended the expiration of its offer for CF Industries to midnight ET on Nov. 13 from Oct. 22.

Approximately 9.1 million common shares of CF Industries had been tendered into and not withdrawn from the exchange offer as of 5 p.m. ET on Friday, according to the Agrium release.

In exchange for each CF Industries share, shareholders will receive $40 in cash plus one Agrium share.

As previously reported, CF Industries stockholders had tendered and not withdrawn approximately 11.2 million shares as Sept. 18.

On March 16, 2009, Agrium, a Calgary, Alta., fertilizer company, began the unsolicited exchange offer after CF Industries rejected Agrium's offer to acquire the company in favor of pursuing a deal with Terra.

Terra, a Sioux City, Iowa, nitrogen products company, rejected CF Industries' most recent unsolicited proposal to acquire the company for 0.465 of a share of CF Industries for each share of Terra.

Deerfield, Ill.-based CF Industries Holdings is the holding company for CF Industries, Inc., a producer and distributor of nitrogen and phosphate fertilizer products.

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