S&P reviews Agrium

S&P said it placed Agrium Inc.’s BBB long-term corporate credit rating and BBB senior unsecured debt rating on CreditWatch with positive implications.

The agency also affirmed its A-2 global scale short-term and commercial paper ratings.

S&P said the CreditWatch placement follows the announcement that Agrium and Potash Corp. of Saskatchewan (BBB+/stable/A-2) plan to combine their respective companies in an all equity financed transaction.

Under the terms of the transaction, PotashCorp shareholders will own about 52% of the new company, and Agrium shareholders will own about 48% on a fully diluted basis.

The companies expect to close the transaction by mid-2017.

"Our decision to place Agrium on CreditWatch positive reflects our view that its proposed merger with PotashCorp would result in a stronger overall business risk profile for the combined entity," S&P credit analyst Michelle Dathorne said in a news release.

"We believe the combined entity's expanded product and geographic diversification and vertical integration would result in an improved combined business risk profile relative to our individual assessment of each company's stand-alone business risk profile."

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