CF Industries to buy Incitec Pivot's U.S. ammonia plant in $1.68 B deal
(Reuters) CF Industries Holdings, the world's top ammonia producer, will buy the U.S. manufacturing facility of Australia's Incitec Pivot Ltd in a $1.68 B deal, the companies said on Monday.
The sale of the facility in Waggaman, Louisiana (WALA) is in line with the Australian fertilizer maker's ongoing restructuring plan, which will see the company spin off its explosives manufacturing business - Dyno Nobel.
Incitec has also secured a 25-year supply agreement with CF Industries for up to 200,000 tons of ammonia per annum to support the Dyno Nobel Americas (DNA) explosives business. The facility has a nameplate capacity of 880,000 tons of ammonia annually.
The companies will set aside about $425 M of the deal value for a long-term ammonia offtake agreement.
"The Waggaman facility will fit seamlessly into our network, as well as our strategic focus on ammonia as a clean energy source, given its proximity and pipeline connection to our Donaldsonville, Louisiana, Complex," Illinois-based CF Industries' CEO Tony Will said.
CF Industries expects to implement carbon capture and storage (CCS) at the site on an accelerated timeline, it said.
Incitec had first announced its intention to sell the WALA plant in November and warned that the sale could delay its plans to demerge Dyno Nobel by up to a year.
Incitec plans to separately list Dyno Nobel, which it acquired in 2008 for nearly $3 B ($2.01 B) to spur growth in the explosives and fertilizer businesses which would benefit from the transition to renewable energy and overcome food supply challenges.
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