The Federal Trade Commission has approved a merger in the farm products industry, with some changes that are laid out in a consent order filed today.
The FTC signed off on a deal between Agrium Inc., a Canadian company that sells fertilizers and other agricultural products, and CF Industries Holdings Inc., an Illinois-based outfit that also sells fertilizers.
In order to complete the $5 billion purchase, Agrium will have to sell some assets in the Pacific Northwest and in Illinois.
The FTC’s filing focused on the market for a certain type of nitrogen fertilizer, anhydrous ammonia.
Farmers who use the fertilizer have large up-front costs in special equipment used to apply the product, the complaint said, which makes it unlikely that those farmers could switch to a different product if prices were to go up.
In the Pacific Northwest, the complaint said, the merger would reduce the number of suppliers from two to one, and in regions of Illinois, that number would go from three to two.
It is difficult for other companies to enter the same market, the complaint said, because it would involve extensive regulatory approval.
The consent order will be finalized after a 30-day period for public comments.
