Updated from 10:10 AM EDT.
Shares of Agrium were jumping 7.91% to $96.56 this morning.
The deal could be announced as soon as next week, the sources added. But no final decisions have been made and the companies could decide not to combine.
The possible merger comes as fertilizer companies face slumping crop prices, which have pressured spending by farmers. In the past year, spot potash prices in the U.S. corn belt have dropped 34%, Bloomberg noted.
Canada-based Potash is a fertilizer company which produces various primary crop nutrients, such as potash, nitrogen and phosphate. Agrium is a producer and distributor of agricultural products and services headquartered in Calgary.
Shares of competitor Mosaic (MOS) were also climbing 7.48% to $30.04 late this morning following the report.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C- on Potash stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins.
But the team also finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Recently, 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 articles's author.
You can view the full analysis from the report here: POT