CF Industries, Yara International Call Off Merger Talks; CF Declares Dividend

(RTTNews) - U.S. fertilizer group CF Industries Holdings, Inc. (CF) and Norwegian peer Yara International ASA (YARIY) have Thursday called off their near month long talks on a potential merger of equals transaction as they could not agree on valuation. The deal would have created the world's largest nitrogen fertilizer company, with $18 billion in annual sales.

"Although we identified very significant operational and structural synergies, we were ultimately unable to agree on terms of a transaction that met the requirements of all our respective shareholders," CF President and CEO Tony Will said in a statement.

Yara International had confirmed on September 23 that it is in discussions with U.S. peer CF Industries regarding a potential all-stock merger of equals. CF had also separately confirmed their preliminary discussions.

Apart from the valuation, disagreements were also reportedly faced related to the location of headquarters and the composition of the management team with the Norwegian government, which is Yara's largest shareholder with a 36 percent stake.

For the merger, CF Industries was being advised by Morgan Stanley (MS) and Goldman Sachs Group, Inc. (GS), while Yara was being advised by Citigroup Inc. (C) and ABG Sundal Collier Holding ASA.

CF Industries noted that it has a strong stand-alone business plan and are confident in the material increase in our cash flow generation as our capacity expansion projects come on-stream as scheduled.

The company added that it remains fully committed to driving shareholder value creation by investing in high return projects while returning excess cash to stockholders through dividends and a substantial share repurchase program.

"I want to thank the management team and Board of Directors of Yara International for their cooperation and professionalism throughout our discussions," Will added.

Additionally, CF Industries also announced that its board of directors have declared a $1.50 per share dividend on its common stock, payable on November 28 to stockholders of record as of November 14, 2014.

CF closed Thursday's regular trading session at $253.85, down $0.42 or 0.17% on a volume of 0.93 million shares. The stock lost a further $9.85 or 3.88% in after-hours trading.

Yara shares closed in Oslo at 293.00 Norwegian kroner, down 1.35 percent on a volume of 1.66 million shares.