Fertilizer maker CF Industries to buy OCI assets for $6 bn

US fertilizer maker CF Industries Holdings Inc said it will buy OCI NV's North American and European plants for about USD 6 billion, nearly ten months after the US company's merger talks with Yara International ASA fell apart.The deal will increase CF's production capacity by about 65 percent over the next two years and help it better compete in a fragmented market.

Global fertilizer prices have been under pressure as China steps up production. Fertilizer output growth is expected to outpace demand at least through 2018, according to the International Fertilizer Industry Association.

CF, which is also assuming USD 2 billion of OCI's debt, will become a subsidiary of a new holding company based in the United Kingdom after the deal, the company said.

CF shareholders will own about 72.3 percent of the new company, which will be led by CF's management. OCI will own the rest.

The deal includes OCI's nitrogen plants in Geleen in the Netherlands and Wever, Iowa, besides its interest in an ammonia and methanol complex in Beaumont, Texas.

CF is also buying OCI's global distribution business based in Dubai. The deal excludes OCI's production plants in Egypt and Algeria.

OCI's Amsterdam-listed shares rose about 6 percent to 32.14 euros. CF shares were up about 2 percent in premarket trading.

OCI's shares have risen 15 percent, since the Wall Street Journal first reported talks between the company and CF last month. CF shares have dipped about 2 percent.

OCI said last November it planned to spin off its construction and engineering business and list it in Egypt and the United Arab Emirates.

CF Industries ended merger talks with Norway's Yara International last October after the companies failed to agree on the terms of a deal that would have created a global fertilizer maker worth about USD 30 billion.

Morgan Stanley & Co LLC and Goldman, Sachs & Co are CF's financial advisers, while Skadden, Arps, Slate, Meagher & Flom LLP is the legal adviser.

Zaoui & Co is OCI's lead financial adviser, with Bank of America Merrill Lynch and JP Morgan also advising it.

Cleary Gottlieb Steen & Hamilton LLP and Allen & Overy LLP are OCI's legal advisers.