Yara Chief Says Submitted Bid for BASF Assets, Sees ‘Good Fit’

Yara International ASA (YAR), the world’s largest publicly traded nitrogen-fertilizer maker, said it handed in a second-round bid for BASF SE’s fertilizer operations as it seeks to add to its European nitrate output.

“We’ve submitted a bid, but we haven’t been given a schedule other than that BASF has said, I think, that they expect to close the deal in the first quarter,” Chief Executive Officer Joergen Ole Haslestad said in an Oslo interview today.

BASF, the world’s biggest chemical company, is in talks with potential buyers of its fertilizer units and has hired Morgan Stanley to handle the sale. The assets include a nitrogen site in Antwerp, Belgium, and a share of a venture in France, which together generate about 500 million euros ($710 million) in sales.

The fertilizer industry is consolidating as rising food prices spur farmers to plant more crops, boosting demand for soil nutrients. Yara’s fertilizer deliveries were up 4 percent in the second quarter, led by urea sales. Margins improved for all its main product groups, with the strongest increase for NPK, or nitrogen, phosphorus and potassium, and nitrates.

Yara was outbid by CF Industries Holdings Inc. in a battle to acquire Sioux City, Iowa-based Terra Industries Inc. last year. For the BASF assets, Haslestad said he expected there to be a “lot of competition” and that he’s “hoping” the company would be successful.

“We expect the process will become more concrete over the course of the autumn, and we would very much like to be a part of it,” the chief executive said. BASF’s assets would provide Yara with “more nitrates produced in Europe, in proximity to a market where demand is high. They would fit very well with our structure -- our production and sales structure.”

Burrup Tender

The Oslo-based company is also competing with Orascom for the remaining stake of Burrup Fertilisers Pty, an Australian ammonia producer under receivership. Yara, which owns 35 percent of Burrup’s parent, Burrup Holdings Ltd., wants to take full ownership of the company. A short listing of the bidders is expected to take place on July 22, Haslestad said.

“We very much want it, but it has to be at the right price, not if it is tremendously overpriced -- it’s not as important at that,” he said, declining to specify what its price limit was.

-- Editors: Andrew Noel, Benedikt Kammel

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net

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