UPDATE 2-CHS in $2.8 bln deal with CF for fertilizer supply
* CHS can buy up to 1.7 mln tons of fertilizer annually
* CHS scraps construction of North Dakota fertilizer plant
* Deal for 80 years (Adds details, background)
Aug 12 (Reuters) - U.S.-based agribusiness CHS Inc said it would invest $2.8 billion in a unit of fertilizer producer CF Industries Holdings Inc to secure nitrogen fertilizer supplies.
This is the third deal in a week in the highly fragmented global fertilizer industry, which is trying to cope with weak prices caused by excess supply.
CHS will have the right to buy as much as 1.7 million tons UAN - a solution of urea and ammonium nitrate in water - and urea, at market prices annually, the companies said on Wednesday.
The deal accounts for about 8.9 percent of CF's total production capacity and will be effective for 80 years.
CF said last Thursday it would buy Netherlands-based rival OCI NV's North American and European plants for $6 billion, while CVR Partners LP said on Monday it would buy Rentech Nitrogen Partners LP for $533 million.
CHS, an agribusiness owned by farmers, ranchers and cooperatives across the United States, will be entitled to semi-annual profit distributions from the unit, CF Industries Nitrogen LLC, the companies said. Continued...