CALGARY _ Agrium Inc. (TSX:AGU) and Potash Corporation of Saskatchewan Inc. (TSX:POT) say they expect their merger to close by year-end after receiving conditional approval from Chinese authorities.
In a joint news release, the two fertilizer companies said China’s ministry of commerce has approved the merger but requires the sale of PotashCorp’s minority holdings in Arab Potash Company and Sociedad Quimica y Minera de Chile S.A. within 18 months of closing and Israel Chemicals Ltd. within nine months.
The Chinese approval also requires the conversion of PotashCorp’s equity interest in Sinofert Holdings Ltd. to a passive investment prior to closing and its commitment that Canpotex will remain a reliable supplier of potash to China, they said.
The companies say they have now received clearance for the merger in Brazil, Canada, China, India and Russia, and expect to close the transaction by year-end after getting official U.S. clearance.
The merger is to create a combined company called Nutrien worth about US$36 billion.
Calgary-based Agrium said separately Tuesday it has agreed to sell two American assets to help win U.S. Federal Trade Commission approval of the deal.
It said it is selling its Conda, Idaho-based phosphate production facility and nearby mineral rights for about US$100 million, including working capital, to Toronto-based Itafos (TSXV:IFOS).
It said it is also selling its North Bend, Ohio-based nitric acid facility to a subsidiary of New York-based Trammo Inc. for an undisclosed amount.
Agrium said it will record an after-tax non-cash impairment of $178 million on the sale of the Conda plant, which represents its exit from the superphosphoric acid business in North America.
It said it has signed a long-term agreement with Itafos to supply all of the ammonia the plant needs and buy all of the monoammonium phosphate produced.