CHS Purchases Minority Equity Position in CF
Industries Nitrogen, LLC for $2.8 Billion
CF Begins Shipping Urea and UAN to CHS Under
Long-Term Supply Agreement
CF Industries Holdings, Inc. (NYSE:CF) and CHS Inc.
(NASDAQ:CHSCP) announced today that they have commenced their
previously announced nitrogen fertilizer strategic venture. CHS,
the nation’s leading farmer-owned cooperative, completed its $2.8
billion equity investment in CF Industries Nitrogen, LLC, (“CF
Nitrogen”), a CF Industries subsidiary, and today begins receiving
delivery of urea and urea ammonium nitrate (UAN) from CF Industries
under a long-term supply agreement.
“We are pleased today to start our strategic venture with CHS,
beginning the next chapter in a mutually beneficial long-term
relationship,” said Tony Will, president and chief executive
officer, CF Industries. “The venture will deliver attractive
returns to CF shareholders as the equity investment helps support
our longstanding capital allocation priorities and the supply
agreement connects us to a reliable partner who will take ratable
delivery of product across the year.”
“This is an important day for CHS member-owners as we not only
complete the single largest investment in our history, but more
importantly establish long-term dependable nitrogen fertilizer
supply, supply chain efficiency and opportunity for economic
value,” said Carl Casale, president and chief executive officer,
CHS Inc. “This is a strategic decision about adding value for our
member cooperative- and producer-owners on par with the significant
investments made in our energy and grains businesses over our 85
years of operation.”
CHS has purchased a minority equity interest in CF Nitrogen for
$2.8 billion effective Feb. 1, 2016. Through the investment, CHS
will be entitled to semi-annual profit distributions from CF
Nitrogen based generally on the volume of granular urea and UAN
purchased by CHS pursuant to the supply agreement.
Starting Feb. 1, 2016, CHS is entitled to purchase up to 1.1
million tons of granular urea and 580,000 tons of UAN annually from
CF Nitrogen for ratable delivery. The 1.7 million product tons
available under the supply agreement represent approximately 8.9
percent of CF’s total production capacity once its capacity
expansion projects are completed at Donaldsonville, La., and Port
Neal, Iowa, expected in 2016.
The two companies marked the start of the strategic relationship
with an event for CHS fertilizer customers at CF’s Port Neal
Nitrogen Complex.
About CF Industries Holdings,
Inc.
CF Industries Holdings, Inc., headquartered in Deerfield,
Illinois, through its subsidiaries is a global leader in the
manufacturing and distribution of nitrogen products, serving both
agricultural and industrial customers. CF Industries operates
world-class nitrogen manufacturing complexes in Canada, the United
Kingdom and the United States, and distributes plant nutrients
through a system of terminals, warehouses, and associated
transportation equipment located primarily in the Midwestern United
States. The company also owns a 50 percent interest in an ammonia
facility in The Republic of Trinidad and Tobago. CF Industries
routinely posts investor announcements and additional information
on the company’s website at www.cfindustries.com and encourages
those interested in the company to check there frequently.
About CHS Inc.
CHS Inc. (www.chsinc.com) is a leading global agribusiness owned
by farmers, ranchers and cooperatives across the United States.
Diversified in energy, grains and foods, CHS is committed to
helping its customers, farmer-owners and other stakeholders grow
their businesses through its domestic and global operations. CHS, a
Fortune 100 company, supplies energy, crop nutrients, grain
marketing services, animal feed, food and food ingredients, along
with business solutions including insurance, financial and risk
management services. The company operates petroleum
refineries/pipelines and manufactures, markets and distributes
Cenex® brand refined fuels, lubricants, propane and renewable
energy products.
CF Industries Holdings, Inc. Safe
Harbor Statement
All statements in this communication by CF Industries Holdings,
Inc. (together with its subsidiaries, “CF Industries”), other than
those relating to historical facts, are forward-looking statements.
Forward-looking statements can generally be identified by their use
of terms such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “predict” “project” and similar
terms and phrases, including references to assumptions.
Forward-looking statements are not guarantees of future performance
and are subject to a number of assumptions, risks and
uncertainties, many of which are beyond CF Industries’ control,
which could cause actual results to differ materially from such
statements. These statements may include, but are not limited to,
statements about the future performance and operation of the
strategic venture with CHS Inc. (the “CHS Strategic Venture”);
statements about future strategic plans; and statements about
future financial and operating results.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include,
among others, difficulties associated with the operation or
management of the CHS Strategic Venture; risks and uncertainties
relating to the market prices of the fertilizer products that are
the subject of the supply agreement over the life of the supply
agreement and risks that disruptions from the CHS Strategic Venture
as contemplated will harm CF Industries’ other business
relationships; the volatility of natural gas prices in North
America and Europe; the cyclical nature of CF Industries’ business
and the agricultural sector; the global commodity nature of CF
Industries’ fertilizer products, the impact of global supply and
demand on CF Industries’ selling prices, and the intense global
competition from other fertilizer producers; conditions in the U.S.
and European agricultural industry; difficulties in securing the
supply and delivery of raw materials, increases in their costs or
delays or interruptions in their delivery; reliance on third party
providers of transportation services and equipment; the significant
risks and hazards involved in producing and handling CF Industries’
products against which CF Industries may not be fully insured;
risks associated with cyber security; weather conditions; CF
Industries’ ability to complete its production capacity expansion
projects on schedule as planned, on budget or at all; risks
associated with expansions of CF Industries’ business, including
unanticipated adverse consequences and the significant resources
that could be required; potential liabilities and expenditures
related to environmental, health and safety laws and regulations
and permitting requirements; future regulatory restrictions and
requirements related to greenhouse gas emissions; the seasonality
of the fertilizer business; the impact of changing market
conditions on CF Industries’ forward sales programs; risks
involving derivatives and the effectiveness of CF Industries’ risk
measurement and hedging activities; CF Industries’ reliance on a
limited number of key facilities; risks associated with CF
Industries’ Point Lisas Nitrogen Limited joint venture; acts of
terrorism and regulations to combat terrorism; risks associated
with international operations; losses on CF Industries’ investments
in securities; deterioration of global market and economic
conditions; and CF Industries’ ability to manage its
indebtedness.
Other important factors, relating to the proposed acquisition
(the “OCI Transaction”) by CF Industries from OCI N.V. (“OCI”) of
OCI’s European, North American and global distribution businesses
(the “ENA Business”) and the combination of CF Industries and the
ENA Business under a new holding company (“New CF”), that could
cause actual results to differ materially from those in the
forward-looking statements include, among others: the risk that the
OCI Transaction is not accorded the tax and accounting treatment
anticipated by CF Industries; the effect of future regulatory or
legislative actions on the new holding company (“New CF”), CF
Industries and the ENA Business; risks and uncertainties relating
to the ability to obtain the requisite approvals of stockholders of
CF Industries and OCI with respect to the OCI Transaction; the risk
that governmental or regulatory actions delay the OCI Transaction
or result in the imposition of conditions that could reduce the
anticipated benefits from the OCI Transaction or cause the parties
to abandon the OCI Transaction; the risk that a condition to
closing of the OCI Transaction may not be satisfied; the length of
time necessary to consummate the OCI Transaction; the risk that CF
Industries and the ENA Business are subject to business
uncertainties and contractual restrictions while the OCI
Transaction is pending (including the risk that CF Industries is
limited from engaging in alternative transactions and could be
required in certain circumstances to pay a termination fee); the
risk that the OCI Transaction or the prospect of the OCI
Transaction disrupts or makes it more difficult to maintain
existing relationships or impedes establishment of new
relationships with customers, employees or suppliers; diversion of
management time on transaction-related issues; the risk that New
CF, CF Industries and the ENA Business are unable to retain and
hire key personnel; the risk that closing conditions related to the
Natgasoline joint venture may not be satisfied; the risk that CF
Industries, New CF and the ENA Business will incur costs related to
the OCI Transaction that exceed expectations; the risk that the
businesses of CF Industries and the ENA Business will not be
integrated successfully; the risk that the cost savings and any
other synergies from the OCI Transaction may not be fully realized
or may take longer to realize than expected; the risk that access
to financing, including for refinancing of indebtedness of the ENA
Business or CF Industries, may not be available on a timely basis
and on reasonable terms; unanticipated costs or liabilities
associated with the OCI Transaction-related financing; the risk
that the credit ratings of New CF and CF Industries, including such
ratings taking into account the OCI Transaction and related
financing, may differ from CF Industries’ expectations; risks
associated with New CF’s management of new operations and
geographic markets; and the risk that the ENA Business is unable to
complete its current production capacity development and
improvement projects on schedule as planned, on budget or at
all.
More detailed information about factors that may affect CF
Industries’ performance and could cause actual results to differ
materially from those in any forward-looking statements may be
found in CF Industries Holdings, Inc.’s filings with the Securities
and Exchange Commission (the “SEC”), including CF Industries
Holdings, Inc.’s most recent periodic report filed on Form 10-Q,
which is available in the Investor Relations section of CF
Industries’ web site. Please refer to the Risk Factors section of
the Registration Statement on Form S-4 filed with the SEC by CF
B.V. (SEC File No. 333-207847) for a description of additional
factors that may affect CF Industries’ performance and could cause
actual results to differ materially from those in any
forward-looking statements. Forward-looking statements are given
only as of the date of this communication and CF Industries
disclaims any obligation to update or revise the forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
CHS Safe Harbor
Statement
This document contains, CHS Inc. (“CHS”) publicly available
documents may contain, and CHS officers, directors and other
representatives may from time to time make, “forward–looking
statements” within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995.
Forward–looking statements can be identified by words such as
“anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,”
“project,” “estimate,” “expect,” “strategy,” “future,” “likely,”
“may,” “should,” “will” and similar references to future periods.
Forward–looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
CHS’s current beliefs, expectations and assumptions regarding the
future of its businesses, financial condition and results of
operations, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward–looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of the
control of CHS. CHS’s actual results and financial condition may
differ materially from those indicated in the forward–looking
statements. Therefore, you should not place undue reliance on any
of these forward–looking statements. Important factors that could
cause CHS’s actual results and financial condition to differ
materially from those indicated in the forward–looking statements
are discussed or identified in CHS’s public filings made with the
U.S. Securities and Exchange Commission, including in the “Risk
Factors” discussion in Item 1A of the CHS Annual Report on Form
10–K for the fiscal year ended August 31, 2015. Any
forward–looking statements made by CHS or its representatives in
this document are based only on information currently available to
CHS and speak only as of the date on which the statement is made.
CHS undertakes no obligation to publicly update any forward–looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise, except as required by applicable law.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction
pursuant to or in connection with the proposed transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, and otherwise in accordance with
applicable law.
Additional Information
CF B.V. (“New CF”) has filed with the SEC a registration
statement on Form S-4 (SEC File No. 333-207847) that includes a
preliminary proxy statement of CF Industries Holdings, Inc. (“CF
Industries”) and a preliminary shareholders circular of OCI N.V.
(“OCI”), each of which also constitutes a preliminary prospectus of
New CF. The registration statement has not been declared effective
by the SEC. The definitive proxy statement/prospectus will be
delivered to CF Industries shareholders and the definitive
shareholders circular/prospectus will be delivered to OCI
shareholders as required by applicable law after the registration
statement becomes effective. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS, THE SHAREHOLDERS
CIRCULAR/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security
holders will be able to obtain free copies of the proxy
statement/prospectus, the shareholders circular and other documents
filed with the SEC by New CF and CF Industries through the website
maintained by the SEC at www.sec.gov. In addition, investors and
security holders will be able to obtain free copies of the proxy
statement/prospectus, the shareholders circular and other documents
filed by CF Industries and New CF with the SEC by contacting CF
Industries Investor Relations at: CF Industries Holdings, Inc., c/o
Corporate Communications, 4 Parkway North, Suite 400, Deerfield,
Illinois, 60015 or by calling (847) 405-2542.
Participants in the
Solicitation
CF Industries and New CF and their respective directors and
executive officers and OCI and its executive directors and
non-executive directors may be deemed to be participants in the
solicitation of proxies from the stockholders of CF Industries in
connection with the proposed transaction. Information regarding the
directors and executive officers of CF Industries is contained in
CF Industries’ proxy statement for its 2015 annual meeting of
stockholders, filed with the SEC on April 2, 2015, and CF
Industries’ Current Report on Form 8-K filed with the SEC on June
25, 2015. Information about the executive directors and
non-executive directors of OCI is contained in OCI’s annual report
for the year ended December 31, 2014, available on OCI’s web site
at www.oci.nl. Other information regarding the persons who may,
under the rules of the SEC, be deemed participants in the
solicitation of the stockholders of CF Industries in connection
with the proposed transaction, including a description of their
direct or indirect interests, by security holdings or otherwise, is
set forth in the preliminary proxy statement/prospectus filed with
the SEC by New CF.
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version on businesswire.com: http://www.businesswire.com/news/home/20160201005693/en/
CF Industries Holdings, Inc.Chris Close,
847-405-2542Director, Corporate
Communicationscclose@cfindustries.comorDan Aldridge,
847-405-2530Director, Investor
Relationsdaldridge@cfindustries.comorCHS Inc.Lani Jordan,
651-355-4946Director, Corporate
Communicationslani.jordan@chsinc.com
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