Agrium Merger

agu   pot

On September 12th, Agrium announced they were merging with Potash Corporation of Saskatchewan Inc. (POT).  Although billed as a merger of equals, the terms appear to favor Agrium shareholders (of which I am one).  Terms of the all stock transaction are POT shareowners get .4 shares of newco (52%) with AGU shareowners getting 2.23 shares of newco (48%).  Closing is expected mid-2017.

I guess my main question is whether this deal will be the stabilizing factor Potash needs (following dividend cuts) or if Agrium follows POT’s lead.  The answer, I’m sure, lies in commodity pricing.  I’ll ride along and perhaps add a few more shares while the regulators have their say.  I’ll add a link to Morningstar’s analysis.

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