UPDATE 4-Norway's Yara, CF in talks to create $27.5 bln global fertiliser producer

Tue Sep 23, 2014 12:39pm EDT
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* Yara shares surge nearly 9 pct, CF shares up 3.5 pct

* Potential merged company would rival Potash Corp in market cap

* Fertiliser margins under pressure, market oversupplied (Adds Breakingviews link)

By Balazs Koranyi and Joachim Dagenborg

OSLO, Sept 23 (Reuters) - Norway's Yara and Chicago-based CF Industries are in talks about a merger of equals that would create a $27.5 billion global fertilizer producer to rival world No.1 Potash Corp in an oversupplied and fragmented market.

The deal would give Yara, the world's biggest nitrate fertiliser maker, major production units in the United States, where costs are lower due to cheap gas. CF Industries would gain a global footprint through Yara's presence in 150 countries with production assets and a well established distribution network.

The two firms' combined market capitalisation of $27.5 billion would put it almost on par with Canada's Potash Corp of Saskatchewan, the world' largest fertilizer firm worth $28.9 billion.

The firms said in separate filings that the talks were at an early stage, and there were no assurances that these would result in any transaction.

Yara said it had been forced to go public because information about the talks were at a risk of a leak. It wanted to conclude the process quickly but said nothing was expected in the coming days.   Continued...