(Adds details of recommendation, vote)
Oct 17 Investor advisory company Institutional
Shareholder Services (ISS) has recommended that investors in
fertilizer producers Agrium Inc and Potash Corp of
Saskatchewan support a merger of the companies.
The decision was distributed to ISS clients on Friday and
sent to media on Monday. The combination would create a company
with significant leverage, ISS wrote in its report.
The $26-billion all-stock deal combines Potash's crop
nutrient production capacity, the world's largest, with Agrium's
farm retail network, North America's biggest.
For Agrium investors, concerns that they would become more
exposed to slumping potash prices are mitigated by the expected
$500 million in savings from the tie-up, ISS said. For Potash
shareholders, the deal offers an attractive chance to diversify
with Agrium's farm retail network, the advisory company said.
Potash executives would collect payments of $24.7 million
and Agrium executives would get $20.4 million to compensate them
for a change in control of the companies, ISS said.
Agrium shareholders will meet to vote in Calgary, Alberta on
Nov. 3, while Potash investors meet the same day in Saskatoon,
Saskatchewan. Potash shareholders would own 52 percent of the
The deal, which requires two-thirds approval by shareholders
of each company, is expected to be completed by mid-2017,
pending regulator review.
U.S.-listed shares of both companies dropped about 1.4
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by
Chris Reese, Bernard Orr)