Yara International of Norway, the world's biggest mineral fertiliser producer, said Monday it made a cash offer of 4.1 billion dollars (3.0 billion euros) for US firm Terra Industries. The move signals an attempt by Yara to become a North American giant and a new transatlantic leader in the fertiliser business.
"The new company will be the major domestic player in North America in combination with being the largest importer (of fertilisers), which is Yara's position today," Yara's chief financial officer Hallgeir Storvik said in a presentation Monday. has been approved by both company's boards.
The offer is expected to be partly financed by issuing shares worth between 2.0 to 2.5 billion dollars. The rights issue has been approved by the major shareholders, including the Norwegian government which has a 36.21 percent stake in the group, Yara said. At just over 41 dollars per share, the offer is 23.6 percent over the closing price of Terra shares on Friday, Yara said.
"Yara and Terra are a perfect fit, and the combination will elevate Yara to a truly global leader in the industry. Both companies are strong in ammonia and nitrates, and have complementary geographical footprints," Yara's chief executive Joergen Ole Haslestad said. In 2009, a difficult year for the fertiliser industry, Yara's net profit fell by more than 50 percent to 3.8 billion kroner (469 million euros, 642 million dollars) from 8.2 billion dollars a year earlier.