Norwegian fertilizer and chemical company Yara International has signed on to buy nitrogen manufacturer Saskferco for $1.6 billion, the Saskatchewan company’s owners announced Monday.
Saskferco’s joint owners, Minnesota-based potash and phosphate firm Mosaic and Investment Saskatchewan, a provincial Crown investment company, will sell their stakes pending federal regulatory approval in a deal that’s expected to close in the third quarter of this year.
“This sale represents fair value for Saskferco,” said Lyle Stewart, the provincial minister responsible for Investment Saskatchewan, in a joint release Monday.
“The timely sale of Saskferco will allow us to focus on our core potash and phosphate businesses, with the proceeds from the sale to be used for the planned
expansions of our Saskatchewan potash mines and other non-U.S. assets,” said Mosaic CEO Jim Prokopanko in the same release.
Mosaic, formed in 2004 from a merger by IMC Global and Cargill Crop Nutrition, laid out plans in April this year to spend $3.15 billion expanding its potash mines at three sites in Saskatchewan over the next 12 years.
Billed by Mosaic as “one of the world’s most efficient nitrogen production facilities,” Saskferco is headquartered in Regina with a fertilizer plant at Belle Plaine, about 30 km east of Moose Jaw, and a warehouse at Carman, Man., about 80 km southwest of Winnipeg.
The Belle Plaine plant, built in 1992, produces 2,850 tonnes of urea, 1,860 tonnes of anhydrous ammonia and 670 tonnes of UAN solution (28-0-0) daily.
Yara’s investment will be the Oslo-based company’s only production capacity so far in North America. It owns facilities throughout Europe as well as in Brazil and Trinidad, plus stakes in joint ventures in the U.K., Australia, Qatar and Russia.
Yara announced at the end of June that its CEO, Thorleif Enger, will retire and will be replaced by Jorgen Ole Haslestad, currently CEO of Siemens’ industry solutions division, in September this year.
Haslestad, who has worked for Siemens for 14 years and has also sat on Yara’s board of directors since 2004, was previously CEO of Kongsberg Offshore.
Yara markets its YaraVita line of plant nutrients in Canada and employs some sales staff in the eastern provinces.