OTTAWA, ONTARIO, Nov. 4, 2009 (Marketwire) -- The Competition Bureau announced today that it has reached an agreement with Agrium Inc. to resolve competition concerns related to Agrium's proposed acquisition of CF Industries Holdings Inc.
This agreement follows a detailed review of the proposed transaction, during which the Bureau concluded that the acquisition would likely lead to a substantial lessening and/or prevention of competition in the wholesale supply of certain nitrogen fertilizer products in Alberta and Saskatchewan. The remedy package will protect competition in the supply of fertilizer products used by farmers in Western Canada, in the event that Agrium is ultimately successful in its bid for CF Industries.
Under the terms of the Consent Agreement, Agrium will divest half of its nitrogen-based fertilizer production facility in Carseland, AB, and will be required to supply additional product to Terra Industries, Inc., a new entrant into Western Canada.
"The Bureau is committed to ensuring that fertilizer markets in Canada remain competitive, and we are confident that Agrium's commitments will remedy our concerns," said Melanie Aitken, Commissioner of Competition.
Under the terms of the agreement, Terra will purchase 50 per cent of Agrium's ammonia and urea production complex in Carseland, AB. Agrium and Terra have also agreed to a five-year supply contract, under which Terra will receive a minimum of 60,000 metric tonnes of urea per year. As a result, a combined total of 466,000 metric tonnes of nitrogen-based fertilizers will be available to Terra per year, through both the production complex and the supply agreement. Mergers in Canada are subject to review by the Competition Bureau under the Competition Act to ensure that they will not result in a substantial lessening and/or prevention of competition. During the course of the Bureau's review of the proposed transaction, staff cooperated closely with their counterparts at the U.S. Federal Trade Commission.
Once filed with the Competition Tribunal, the full text of the Consent Agreement will be available on the Tribunal's Web site (http://www.ct-tc.gc.ca/).
The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.