CF Industries, one of the leading nitrogen producers in the US, has taken full control of the UK’s largest fertiliser manufacturer, GrowHow, after it acquired the outstanding 50% of the businesses from Yara. The deal values GrowHow at more than $1.16bn (€1.05bn).

CF will pay $580m in cash to Yara for its 50% stake in Growhow but will pay a further $68m to cover Yara’s 50% liability share in the $140m pension deficit at GrowHow.

GrowHow, which was founded in 2007 as a 50:50 joint venture between Yara and CF Industries, operates two large scale nitrogen production facilities in the UK with total production capacity of 0.8 million tons of ammonia, 1.1 million tons of ammonium nitrate and 0.5 million tons of NPK. The business recorded earnings (EBITDA) of $156m in 2014.

Europe

Taking full control of GrowHow will strengthen CF Industries foothold in the Europe, a market it has been eager to expand its business in over recent years. Last year, CF had been in talks with Yara over a possible merger that would create the world’s largest nitrogen company. However, talks broke down last October after the companies failed to agree terms.

Despite the disposal of its stake in GrowHow, Yara says it remains dedicated to British agriculture. Time will tell if the sale of GrowHow has any impact on Yara’s operations in Ireland, where the Norwegian group are major suppliers of nitrates, particularly CAN, to the Irish market.

While they had a direct route to market in the UK, through Growhow, they operated a different structure in Ireland. Yara is an important supplier of raw material to the importers in Ireland however in recent years it developed a direct marketing presence here, based out of Belfast where it sells Yara branded bagged product direct to merchants, co-ops and farmers.