Moody’s might lift Agrium

Moody's Investors Service said it placed the Baa2 long-term ratings of Agrium Inc. under review for upgrade following the announced merger of equals with Potash Corp. of Saskatchewan Inc. (A3, under negative review).

The company's P-2 short-term rating was affirmed.

The proposed merger was approved by both companies' boards of directors, but remains subject to approval by shareholders, as well as review by various regulatory and judicial bodies.

Moody’s said the review for upgrade reflects Agrium's merging with a company with a stronger credit profile as well as the fundamental benefits gained from the creation of a larger company, the addition of Potash’s high quality assets, as well as the $500 million in annual synergies that are anticipated to be realized from the combined entity.

The transaction is expected to close in mid-2017.

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