Updated from 11:52 a.m. EDT

NEW YORK (TheStreet) -- Shares of Agrium (AGU) were surging 6.02% to $94.87 on heavy trading volume early Tuesday afternoon after confirming that it is in preliminary discussions to merge with rival fertilizer company Potash (POT). 

Potash stock was up 10.90% to $17.80 this afternoon.

No decision has been made about whether to proceed with the deal, Agrium added in a statement. 

Earlier today, Bloomberg reported that a combination between the companies could be announced as soon as next week. 

Fertilizer companies have been contending with lower prices and a drop in spending by farmers, Bloomberg notes. 

About 1.89 million shares of Canada's Agrium have been traded so far today vs. the company's average trading volume of roughly 505,702 shares per day. 

Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.

Agrium's strengths such as its attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: AGU

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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