Merger season is now open

Last week, CF Industries announced that it was merging with OCI. This morning, CVR announced it was merging with Rentech.

I’ll go into this in more detail soon, but the salient points are these:

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CF Industries will:

  • become the biggest nitrogen producer in the world (ahead of Yara), gaining two new plants in the US (Beaumont and Wever) and one in Geleen, in the Netherlands,
  • do a tax inversion to become a British Dutch company, having just bought out Yara’s share of their GrowHow joint venture with two plants in the UK,
  • pay a tax rate of approximately 20% in the future, as a British Dutch company, instead of their current 34%,
  • be one of the world’s biggest methanol producers – which seems weird and slightly wrong for the low-cost nitrogen specialists, but who knows how long it will last,
  • need to pass anti-trust concerns in both the US and Europe, about which CF is confident but I’m sceptical.

See CF’s PDF presentation for more details.

CVR will:

  • be the second largest producer of UAN in the US (for now),
  • gain feedstock diversification, as their existing Coffeyville plant uses petcoke, and Rentech’s East Dubuque plant (recently expanded) uses natural gas,
  • not be subject to any anti-trust concerns that I can see.

See CVR’s PDF presentation for more details.

I’m inclined to think this is just be the beginning of the mergers and acquisitions season.

Who’s next?[/memberful]

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