Shares of Nutrien Ltd., began trading on Tuesday, marking nearly 15 months of work to merge two of Canada’s largest potash companies – Agrium Inc. and Potash Corporation of Saskatchewan Inc. (PotashCorp).
The companies received the final approval to complete the merger just last week.
“It’s going to create a lot of opportunities to lower the cost of production, be more effective, and be more competitive on the world market,” Richard Downey, Nutrien’s vice-president of investor and corporate relations, said.
The combined company has more than 1,500 farm retail centres and employs nearly 20,000 people through its operations and investments in 14 different countries. The new company is worth $34 billion.
The merger saw shareholders receive 0.40 Nutrien shares for each common share of PotashCorp they owned and 2.23 Nutrien shares for each Agrium share they owned.
The company is traded on the Toronto and New York stock exchanges under the ticker symbol NTR.
“Nutrien is trading up over $66 in trading,” Sean Meshke, portfolio manager with PWM Private Wealth Counsel, said. “So the stock market is liking it and you’re starting to see that in the higher share price.”
Nutrien stock finished its first day of trading at $69 per share.
According to Nutrien, the merger is expected to result in operating synergies and savings of US$500 million by the end of 2019.
Most of the synergies are around being effective and efficient as well as operating as one organization,” Downey said. “A lot of it is in terms of lowering costs of production, in terms of delivering product more effectively and efficiently.”
According to a release from the company, savings will be found in procurement, distribution and retail integration, production and optimization; financial experts in Saskatchewan have concerns.
“There could be some harder times with Saskatchewan,” Meshke said. “One of the synergies tends to be shutting down mines or laying off people to cut the costs.”
Meshke pointed to the fact the merger means there are two of nearly every department like accounting and human resources.
Chuck Magro, Agrium’s chief executive officer, assumed the same role at the merged company, while PotashCorp chief executive officer Jochen Tilk became the executive chairman.
“The Government of Saskatchewan is cautiously optimistic about what this means for new jobs in Saskatchewan and we should have something further to say later this week,” government spokeswoman Trelle Kolojay said in a statement to Global News on Tuesday.
Nutrien will maintain two corporate offices, one in Calgary and its head office in downtown Saskatoon.
With files from The Canadian Press