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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