Out Fox The $treet

Potash Corp. and Agrium officially announced a merger agreement. The merger of equals will provide tons of benefits to shareholders including a dominant market position in crop inputs and $500 million in synergies. An investment in the merger deal assumes regulators will approve the top two players in the fertilizer segment forming a dominant industry player. In a time period when numerous large scale mergers have been blocked by government regulators, the decision of  Potash Corp. (NYSE: POT )  and  Agrium (NYSE: AGU )  to go forward with a merger is interesting. Even more interesting is that a large amount of the  merger presentation  appeared to highlight the very benefit as having the largest scale by far in the crop input segment. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please read the disclaimer page for more details.

After several weak months of potash pricing caused by the collapse of the Belarusian Potash marketing arrangement, Potash Corp. ( NYSE: POT     ) made a decision last month to cut costs in just about every corner of the company. Considering the apparent pricing advantage of Russian producer OAO Uralkali, will those cost cuts be enough to matter? Potash is a Canadian-based fertilizer stock that controls a majority of the Canpotex marketing partnership. Both Mosaic ( NYSE: MOS     ) and Agrium ( NYSE: AGU     ) provide a smaller level of potash to what is commonly referred to as the Canadian potash 'cartel.' Besides potash, Potash Corp. mines other fertilizers including phosphates and nitrogen, but previously potash was the most important by far, providing gross margins approaching 60% and a majority of the gross profit generated by the company. Read the full article here . Disclosure: No positions mentioned. Please review the disclaim...

Last summer, fertilizer stocks plummeted on fears that the Russia-Belarus potash dispute would flood the market with cheap potash. The issue sent shares of Mosaic ( NYSE: MOS     ) and Potash ( NYSE: POT     ) plunging and didn't help Agrium ( NYSE: AGU     ) either. Fertilizer stocks have been interesting investments over the last few years with the long-term theme of demand from emerging markets not playing out. On the flip side, the dispute between Russia and Belarus brought to the surface the pricing structure in the potash market that might not be sustainable. Read the full article here . Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Just last week on the 5th, CF Industries (CF) upped their bid for Terra Industries (TRA) from its prior bid of 0.4129 to 0.4539 shares to 0.465 CF shares. The deal currently values TRA at nearly $39 share (.465 x $83 CF share) or 30% above its Friday closing price of $29.91. How could the TRA BOD turn down that sweet offer? Many reasons exist for turning down a premium offer such as shareholder growth would be higher as an independent compared to being part of a conglomerate, shareholders want cash for various reasons including the premium can be wiped out if the aquiorors price drops after announcing the deal, or the premium just isn't large enough to cash out. In this case, the BOD is definitely leaning to the later but it just doesn't add up. Both companies have similar revenue, income, and growth prospects. TRA shareholders are basically getting a big company with the same basic growth - analysts list both companies with identical 5 year growth rates. The main wrinkle in ...

Bought Agrium (AGU) today for all 3 portfolios. AGU provides an investment for the portfolios that is tied into the agriculture market. A sector that has been greatly lagging and the prices are finally right. The Growth Portfolio is invested in FCStone (FCSX) that benefits greatly from the ag market, but AGU gives the portfolio its only real investment in the sector. Agriculture is a great place to invest now since stock prices have fallen greatly but the end user demand has only fallen in the short term. Low inventory levels of corn compared to long term fast growing demand especially from China and India and even renewable fuels such as the ethanol mandates in the US should considerably increase the demand for the fertilizer products of AGU. Agrium engages into retailing of agricultural products and services. It also produces and markets agricultural nutrients and supplies fertilizers in North America. Agrium operates through three segments: Retail, Wholesale and Advanced Technologie...