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National & World Ag News Headlines |
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CHS Executes Minority Purchase of CF Industries' Nitrogen
USAgNet - 02/02/2016
CF Industries Holdings, Inc. and CHS Inc. announced they have commenced their previously announced nitrogen fertilizer strategic venture. CHS, the nation's leading farmer-owned cooperative, completed its $2.8 billion equity investment in CF Industries
Nitrogen, LLC and begins receiving delivery of urea and urea ammonium nitrate from CF Industries under a long-term supply agreement.
"We are pleased today to start our strategic venture with CHS, beginning the next chapter in a mutually beneficial long-term relationship," said Tony Will, president and chief executive officer, CF Industries. "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."
CHS has purchased a minority equity interest in CF Nitrogen for $2.8 billion effective Feb. 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 UAN
purchased by CHS pursuant to the supply agreement.
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 approximately 8.9 percent of CF's total
production capacity once its capacity expansion projects are completed at Donaldsonville, La., and Port Neal, Iowa, expected in 2016.
The two companies marked the start of the strategic relationship with an event for CHS fertilizer customers at CF's Port Neal Nitrogen Complex.
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