The owners of Saskferco have announced a deal worth $1.6 billion just weeks after officially confirming the nitrogen fertilizer plant was for sale.
Mosaic Co. and Investment Saskatchewan announced July 14 that their jointly owned plant at Belle Plaine, Sask., had been sold to Yara International ASA of Oslo, Norway.
Lyle Stewart, minister responsible for Investment Saskatchewan, said the sale represented fair value for the company. The province will earn about $750 million from the sale.
The deal is expected to close this fall and is subject to approvals under the Investment Canada Act and Canadian competition legislation.
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“We are pleased to reach an agreement for the sale of Saskferco,” said Mosaic chief executive officer Jim Prokopanko in a news release. “The timely sale of Saskferco will allow us to focus on our core businesses of potash and phosphates, and proceeds from the sale will contribute to our planned expansions of our Saskatchewan potash mines and other non-U.S. assets.”
Mosaic is one of the world’s largest producers of phosphate and potash crop nutrients.
Saskferco was established in 1988 and opened in 1992, becoming an industry leader in producing granular urea and anhydrous ammonia. It expanded in 1997, added a urea and ammonium nitrate (UAN) solution plant in 2004 and announced another expansion last year. It employs about 150 people.
Originally, the province partnered with Cargill to build the plant, putting in $68.5 million over three years and guaranteeing more than $300 million of debt.
Since then the province has earned about $200 million from its investment.
Mosaic came into possession of half the company when Cargill Crop Nutrition and IMC Global merged.
Yara is a long-established Norwegian company with interests worldwide. It is the world’s largest supplier of mineral fertilizer, employs about 7,000 people and in second quarter financial results announced July 15 reported revenue of $4.76 million, up from $2.73 million in the same quarter last year.
According to a company news release, it will fund the purchase through existing credit lines.
CEO Thorleif Enger said the acquisition fits with Yara’s growth strategy.
“It provides a strong foundation for further growth through an efficient manufacturing facility located close to major gas production and with proximity to an important regional agricultural market for urea and UAN,” he said.
The province has said it would use its share of the proceeds to pay for infrastructure projects and pay down debt.
Yara’s North American head office is in Florida. It also has sales offices in California and Montreal.
