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) -- Norway's

Yara International

agreed to acquire

Terra Industries


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

TheStreet Recommends


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,



CF Industries

(CF) - Get CF Industries Holdings, Inc. Report

ended its

yearlong hostile pursuit of Terra Industries

in January, withdrawing its $4.2 billion bid for the smaller fertilizer company.

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