- Thomson Reuters
Potash Corporation of Saskatchewan and Agrium are merging to create the largest crop nutrient company in the world.
The deal, valued at $27 billion, will also create the third largest natural resources company in Canada.
Bank of America Merrill Lynch and RBC Capital Markets advised Potash on the deal while Barclays and CIBC World Markets advised Agrium. Morgan Stanley is a joint financial adviser to both companies.
It is expected that Potash and Agrium will each pay around $40 million to $45 million each in advisory fees, according to the consultant Freeman & Co. That would bring the total fees for the deal to close to $90 million.
The deal is a boost for Canadian banks RBC Capital Markets and CIBC World Markets, which both have strong advisory businesses in the energy sector.
RBC Capital Markets also advised the Canadian pipeline company Enbridge on its deal to buy Houston-based Spectra Energy. That deal, valued at $43.1 billion, is the third biggest announced mergers-and-acquisitions transaction this year, according to Dealogic.
The Potash-Agrium deal is the latest in a series of megadeals involving the global farming sector, including the pending merger of Dow and DuPont; ChemChina’s deal for Syngenta, the Swiss seeds-and-pesticides group; and Bayer’s bid for Monsanto, the world’s largest supplier of crop seeds and genetically modified seeds.
It also comes on the heels of a big week for M&A, with more than $100 billion in deal activity announced in the week starting September 5.
It’s not all good news for dealmakers, however. The German industrial-gases group Linde and US rival Praxair said on Monday they ended talks to create a $60-billion-plus market leader.