CF Industries will acquire Viterras stake in their Canadian Fertilizers Ltd. (CFL) joint venture in Medicine Hat, Alberta, for C$915 million in cash, the companies said on Friday.
CF struck the deal with Switzerland commodities group Glencore International, which in March 2012 agreed to acquire Canadian agri-business group Viterra.
Under the CFL venture, CF was already lead operator of the Medicine Hat complex, which has over 1.2 million tpy of ammonia capacity and 810,000 tpy of urea.
However, acquiring full control will give CF an additional 425,000 tpy of ammonia capacity and 275,000 tons of urea, the company said.
This acquisition is a low-risk expansion of our nitrogen supply capability, as we have operated the complex for over 35 years, said Stephen R. Wilson, CEO of CF.
It will add ... to our nitrogen production capacity in a region with low natural gas costs, he added.
As a result of the deal and subject to the product purchase agreements, CF will now be entitled to purchase 100% of CFLs ammonia and urea production, the company said.
The completion of the deal is subject to the closing of Glencores acquisition of Viterra, receipt of regulatory approvals in Canada and other terms and conditions.
Glencore had previously attempted to sell the Viterra stake in CFL to rival Canadian fertilizer firm Agrium.