As rumored in April and confirmed in May, Honeywell is spinning off its resins and chemicals business, including its ammonia plant at Hopewell, VA.
However, in its latest announcement, Honeywell has moved the schedule up: to this month, from the originally announced early 2017. The date of record is this Friday, September 16th.
The merger of equals between PotashCorp and Agrium was confirmed to be moving ahead this morning, in a press release announcing their boards' unanimous approval of the plan "to Create a World-Class Integrated Global Supplier of Crop Inputs."
"A new parent company will be formed to own both companies. PotashCorp shareholders will receive 0.400 common shares of the new company for each common share of PotashCorp they own, and Agrium shareholders will receive 2.230 common shares of the new company for each common share of Agrium they own."
Bloomberg broke news today of a potential merger between Agrium and PotashCorp:
The combination could be announced as soon as next week, the people said, asking not to be identified because the deliberations are private. No final decisions have been made and the Canadian companies could decide against a deal, they said.
CF Industries terminated its proposed merger with OCI this morning.
"The Treasury announcement on April 4, 2016 materially reduced the structural synergies of the combination. Since that time, both companies have worked together collaboratively ... However, the companies were unable to identify an alternative acceptable to both parties and, therefore, agreed to terminate the combination."
As rumored last month, Honeywell yesterday confirmed its plans to spin off its resins and chemicals business, including the ammonia plant at Hopewell, and expects the transaction to be "completed by early 2017."
LSB Industries will soon be a pure-play nitrogen producer. It announced this morning that it "has entered into a definitive agreement to sell the Company's Climate Control Business."
Although separating its two businesses has been an explicit possibility for some time, and this sale makes a lot of sense, the timing is noteworthy. LSB has been forced into making deals to stay afloat since the costs of its El Dorado expansion spun out of control in 2015.
Bloomberg News ran an article last week suggesting that Honeywell was "considering exiting its business that makes chemicals for manufacturing nylon," which would include its ammonia plant at Hopewell, VA.
Honeywell is working with financial advisers on options for the caprolactam unit, which could be spun off or sold, said the people, who asked not to be identified because the plans aren't public. The business earmarked for divestment generates an estimated $150 million to $200 million in profit, according to one of the people. It could fetch about $1 billion, a separate person said.
CVR Partners closed its merger with Rentech today, giving birth to a new subsidiary, East Dubuque Nitrogen Fertilizers, LLC, which will now operate the nitrogen plant in East Dubuque, IL.
CVR Partners previously ran just one nitrogen plant, the Coffeyville, KS, ammonia-UAN plant, which gets its pet coke feedstock from its sister refinery (owned by CVR Energy, the parent company of CVR Partners).
So, this merger "provides the partnership with an expanded geographical footprint, diversification of its raw material feedstocks, wider customer reach and greater potential for cash-flow generation."
This week, BioNitrogen filed for Chapter 11 bankruptcy protection.
Hopefully, they'll reorganize and get some traction on their modular biomass-to-urea plants - certainly, they think their assets (patents) are worth more than their debts ($3.5 million) - but they need to convince investors of that, and of their ability to realize their plans (any plans).
BioNitrogen has made so many announcements over the last few years, it's been hard to know what's actually happening.
Two major mergers have been announced in the last seven days - CVR Partners with Rentech, and CF Industries with OCI.
It's fair to say that the competitive landscape for ammonia will soon change, but you could look at both these transactions as companies running fast to stay still.
Any gain in market share caused by each merger is likely to be short-lived, because there are no less than 15 expansion projects already under construction, with more yet to get underway.
Any market share projections that fail to take these expansions into account will be short-sighted, so I've put together some charts ...
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 ...