Norway's Yara Buys Terra for $4.1B
SIOUX CITY, Iowa (
) -- Norway's
Yara International
agreed to acquire
Terra Industries
(TRA)
for $4.1 billion.
Yara will pay $41.10 a share, a 23.6% premium over Terra's closing price on Friday of $33.25.
Michael Bennett, Terra's CEO and president said in a statement, "We have enjoyed a strong partnership with Yara since forming GrowHow UK in 2007, a joint venture operation in the United Kingdom."
"Yara has a solid understanding of the nitrogen business and the value we place on producing and distributing ingredients essential to meeting the needs of a growing global population," he added.
Yara intends to fund a portion of the transaction through a planned $2 billion to $2.5 billion rights offering. The transaction is expected to close by the end of the second quarter.
Yara CEO Joergen Ole Haslestad told
Reuters
that the all-cash Terra purchase "will create a clear global No. 1 in the fertilizer industry." The production costs for urea -- the main component of nitrogen-based fertilizer -- inherited from the Terra deal would be half the $1,500 per metric ton it would cost to build new capacity,
Reuters
reports.
CF Industries
(CF) - Get Report
ended its
yearlong hostile pursuit of Terra Industries
in January, withdrawing its $4.2 billion bid for the smaller fertilizer company.
Follow TheStreet.com on
and become a fan on