Talks over a possible merger between Yara, the world’s largest fertilizer company, and Chicago-based CF Industries have collapsed.

Talks were ongoing between the two companies over a possible merger that would have created a giant fertilizer company with annual sales over $20bn and a production capacity of 45m tonnes a year. It would have had 25% of the global fertilizer market.

Both companies identified significant financial synergies and cost savings in a 50/50 merger.

The proposed deal would have given Yara a major production base in the US, where costs are lower due to cheap gas, while CF would have gained a global footprint through Yara and a well-established distribution network.

CF ended the talks after concluding a 50% ownership of the new company did not adequately reflect CF’s value with significant near-term expansion in the pipeline.