OAO Uralkali, Russia’s largest potash producer by market value, agreed to acquire OAO Silvinit for $8.2 billion in shares and cash to benefit from rising prices for the crop nutrient.
Uralkali will buy 20 percent of Silvinit from Otkritie Financial Corp for $1.4 billion, or $894.50 a share, Berezniki- based Uralkali said today in a statement. It will acquire the remaining stock with new shares, valued at $6.8 billion according to Bloomberg calculations.
Potash producers are consolidating as an increase in grain prices, driven up this year by drought in Russia, flooding in Canada and parched fields in Kazakhstan and Europe, boosts fertilizer purchases by farmers. Uralkali and Silvinit combined would account for 17 percent of global potash output, making it the second-largest producer after Potash Corp. of Saskatchewan Inc., according to U.K.-based industry consultant Fertecon Ltd.
Shareholders will receive 133.4 shares in Uralkali for each ordinary share in Silvinit they own, and 51.8 shares for each preferred share, according to the statement. Alexey Sotskov, a spokesman for Uralkali, declined to comment on the $6.8 billion calculation.
