CHS Buys Minority Stake In CF Industries Nitrogen For $2.8 Bln

(RTTNews) - Fertilizer maker CF Industries Holdings, Inc. (CF) and farmer-owned cooperative CHS Inc. (CHSCP) said they have commenced their previously announced nitrogen fertilizer strategic venture.

CHS has purchased a minority equity interest in CF Nitrogen LLC, a CF Industries subsidiary, for $2.8 billion, effective February 1, 2016.

Through the investment, CHS will be entitled to semi-annual profit distributions from CF Nitrogen, based generally on the volume of granular urea and urea ammonium nitrate or UAN purchased by CHS pursuant to a long-term supply agreement.

Starting today, CHS is entitled to purchase up to 1.1 million tons of granular urea and 580,000 tons of UAN annually from CF Nitrogen for ratable delivery.

The 1.7 million product tons available under the supply agreement represent about 8.9 percent of CF's total production capacity once its capacity expansion projects are completed at Donaldsonville, Louisiana, and Port Neal, Iowa, expected in 2016.

Tony Will, president and chief executive officer of CF Industries said, "The venture will deliver attractive returns to CF shareholders as the equity investment helps support our longstanding capital allocation priorities and the supply agreement connects us to a reliable partner who will take ratable delivery of product across the year."