In a surprise move early Monday, Terra Industries Inc. (TRA)
announced that it has agreed to be acquired by Norwegian fertilizer
company Yara International ASA (YAR.OS) for $41.10 in cash per
share, for a total purchase price of $4.1 billion.
On Friday, Sioux City, Iowa-based Terra's shares closed at
$33.25, down 2.3% from Thursday's close.
The announcement comes almost exactly a month after CF
Industries Inc. (CF) withdrew its contentious offer for Terra. CF
had been offering $36.75 and 0.1034 share per Terra share,
amounting to about $46.39 a share at CF's closing price before it
dropped the bid. CF, which had been in pursuit of Terra since the
beginning of 2009, had its three-person slate of directors elected
to Terra's board in November, with 45% of shares backing CF.
CF itself has been the subject of a takeover offer by rival
Agrium Inc. (AGU) for almost as long, though CF has repeatedly
rebuffed Agrium in favor of its now-defunct offer for Terra.
Terra chairman Henry Slack said Monday that Terra's board is
"unanimous in its firm belief that this transaction is compelling
for our shareholders, customers, and employees." Following the
close of the transaction, Terra will become a wholly-owned
subsidiary of Yara and will be called Yara North America.
"Yara and Terra are a perfect fit, and the combination will
elevate Yara to a truly global leader in the industry," said Jorgen
Ole Haslestad, president and chief executive of Yara.
The transaction, which the fertilizer companies expect to close
by the end of the second quarter, is subject to approval by Terra's
shareholders, approval by Yara's shareholders of its rights
offering, as well as antitrust and other regulatory approvals.
Yara plans to fund the acquisition in part through a $2-$2.5
billion rights offering.
-By Tara Zachariah, Dow Jones Newswires; 416-306-2100;
tara.zachariah@dowjones.com
