Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Merger or Acquisition (May 2009)
34 slides from Cf Industries's merger presentation, May 14, 2009
Slide 1: Filed by Agrium Inc. Pursuant to Rule 425
Filed by Agrium Inc. (Commission File No. 333-157966) Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: CF Industries Holdings, Inc. *** Mr. Mike Wilson, President and Chief Executive Officer of Agrium Inc. presented at the BMO Capital Markets Agriculture, Protein & Fertilizer C
Slide 2: Agrium: Growing Across the Value Chain
Fundamentals of Growth Agrium: Growing Across the Value Chain May 2009
Slide 3: Important Information
Important Information This presentation does not constitute an offer to exchange, or a solicitation of an offer to exchange, common stock of CF Industries Holdings, Inc. (“CF”), nor is it a substitute for the Tender Offer Statement on Schedule TO or the Prospectus/Offer to Exchange included in the R
Slide 4: Forward-Looking Statements
Forward-Looking Statements Certain statements and other information included in this presentation constitute “forward-looking information” within the meaning of applicable Canadian securities legislation or constitute “forward-looking statements” (together, “forward-looking statements”). All stateme
Slide 5: Agrium's Growth Across the Value Chain
Agrium’s Growth Across the Value Chain Agrium Wholesale: Retail Customers Industrial $4.7-billion sales Customers Nitrogen, Potash, Distribution Phosphate & Sulphate & Storage Agrium Retail: Distribution Growers $5.5-billion sales* & Storage Purchase for Resale Advanced Growers Potash expansion Tech
Slide 6: Strong Record of Growth & Successful Integration of Acquisitions
Strong Record of Growth & Successful Integration of Acquisitions • Invested approximately $3.4B in past 5 years and achieved synergies greater than announced • Agrium has completed 9 acquisitions in 4 years and other growth initiatives across the value chain 18,000 15,000 CF 12,000 9,000 Expanded ba
Slide 7: 2008 EBITDA by Business Unit & Product
2008 EBITDA by Business Unit & Product PFR and Other 1% Retail Nitrogen 25% 29% 3% Advanced Technologies 2% Phosphate Potash 17% 26% Fundamentals of Growth 6
Slide 8: Largest North American Agricultural Retailer
Largest North American Agricultural Retailer • UAP acquisition boosts net sales to over $5-billion • Well balanced portfolio of seed, fertilizer, crop protection products, and application services • $560-million 2008 EBITDA • Over 800 North American retail centers 2008 Agrium Retail Gross Profit* Ot
Slide 9: UAP Acquisition Expands Diversity & Scale
UAP Acquisition Expands Diversity & Scale wheat and potatoes • Addition of approximately 380 locations nearly doubles Agrium’s retail business • Increases geographic presence in key U.S. plains area as well as Texas and Florida corn • Further geographic, fruits and soybeans crop and product vegetabl
Slide 10: Significant UAP Synergies
Significant UAP Synergies • Anticipate annual synergies of approximately $115-million, phased realization: • ~ $80-million in 2009 • ~ $115-million in 2010 and beyond • Synergies achieved through • Benefit from UAP’s expertise on crop protection procurement • Procurement of crop nutrients and combin
Slide 11: Agrium's Retail Transformation
Agrium’s Retail Transformation Retail EBITDA $600 (US$ millions) Future expected $500 UAP synergies $400 Combined (1) UAP $300 base business $200 Royster Synergies $100 Base business 2007 $0 1999 2000 2001* 2002* 2003 2004 2005 2006 2007 2008 1) Last 12 month EBITDA from UAP as of February 24, 2008
Slide 12: Advanced Technologies
Advanced Technologies • Leader in environmentally friendly specialty products, broad mix of products marketed to: Turf, Ornamental, Greenhouse, High Value Specialty Crops, Lawn and Garden • High and stable margins on controlled release products • ESN® is Agrium’s patented controlled-release product
Slide 13: Wholesale Advantages
Wholesale Advantages - 2.1 mmt low cost production capacity Potash (K) - Diverse global/NA customer base - Over 5.0 mmt production capacity Nitrogen (N) - Natural gas and in-market advantages - Diversified global production assets - Over 1.0 mmt production capacity Phosphate (P) - Two integrated fac
Slide 14: Internationally Competitive Potash
Internationally Competitive Potash % Sales* • Potash Capacity of 2.1 mmt NA sales 54% International 46% • Market Advantages – Market internationally through Canpotex – Strong margins • Cost Advantages – Low-cost production Potash Facility Potash Markets *2-Year Average Sales Volumes Fundamentals of
Slide 15: Agrium Wholesale Production and Distribution
Agrium Wholesale Production and Distribution North America South America San Nicolas Import Terminal (Profertil S.A.)* Agrium Potash Production Bahia Blanca, Argentina Phosphate Mine (Profertil S.A.) * Phosphate Production Nitrogen Production Africa/Middle East Granulation Production Damietta Storag
Slide 16: Agrium and CF Production and Distribution
Agrium and CF Production and Distribution North America South America San Nicolas Import Terminal (Profertil S.A.)* Agrium Potash Production Bahia Blanca, Argentina Phosphate Mine (Profertil S.A.) * Phosphate Production Nitrogen Production Africa/Middle East Granulation Production Damietta Storage E
Slide 17: Our Offer For CF Industries
Our Offer For CF Industries Fundamentals of Growth 16
Slide 18: Our Offer for CF
Our Offer for CF • We are determined to acquire CF, creating significant value for both CF and Agrium stockholders • Our $85.20 offer for CF is a 55% premium to their unaffected stock price, adjusting for net cash, well above precedent transactions since credit crisis • Cash or stock election provid
Slide 19: Estimated CF Unaffected Stock Price of Approximately $61
Estimated CF Unaffected Stock Price of Approximately $61 • CF Share Price Less Net Cash Per Share $ 70 29 % $ 60.88 • CF had $12.38 per share in net $ 60 Implied Unaffected CF cash on January 15th Price Performance $16.64 of Net – This cash is worth no more $ 50 Cash Today¹ $ 47.23 today than it was
Slide 20: 55% Premium to Cash-Adjusted CF Unaffected Stock Price
55% Premium to Cash-Adjusted CF Unaffected Stock Price $ 90 $ 85.20 1 $ 80 40 % Implied Stock Price Premium $ 70 $ 60.88 $ 60 $ 50 55 % Implied Cash- $ 40 Adjusted Premium Today $ 30 $ 20 $ 10 $0 Unaffected CF Stock Agrium Offer Implied Operating Asset Value Per Share CF Net Cash Per Fully Diluted S
Slide 21: Compelling Valuation
Compelling Valuation • Agrium’s revised offer provides a 36% greater EBITDA multiple for CF than CF is offering for Terra (1) – 5.3x vs. 3.9x 2010E EBITDA(1) using CF’s Agrium / CF vs. CF / Terra unaffected share price adjusted to exclude the $85.20 effects of Agrium’s offer $27.63 – Agrium has trad
Slide 22: Conclusion
Conclusion • We are determined to acquire CF – We have raised our offer twice, to a premium of 55% • Our bid provides far superior value for CF stockholders compared with any alternative articulated by CF • Assertions that we are not serious are not credible • Current arb spread reflects concern tha
Slide 23: The Future is Promising
Fundamentals of Growth The Future is Promising
Slide 24: Summary of Revised Offer for CF
Summary of Revised Offer for CF Offer: Agrium to combine with CF in a cash and stock deal • $40.00 in cash and 1 Agrium share • Aggregate consideration of $2.0 billion cash and 50.2 million shares Consideration: • CF shareholders may elect mixed consideration, or cash or shares, subject to proration
Slide 25: Creates a Global Nitrogen Leader
Creates a Global Nitrogen Leader Global Nitrogen Nutrient Capacity 8.0 7.0 6.7 6.4 6.0 5.0 4.0 3.4 3.4 3.4 3.0 3.0 2.3 2.0 1.0 0.0 Yara Combined PCS Terra Agrium CF Koch Agrium/CF Source: British Sulphur and IFDC Fundamentals of Growth 24
Slide 26: Attractive Economics for North American Producers
Attractive Economics for North American Producers • Lower gas prices in NA and higher prices elsewhere, combined with firm nitrogen demand, result in strong NA nitrogen margins NOLA Granular Price = $265/MT 300 250 200 150 $7/ 100 MMBtu* $6 / MMBtu $4/ 50 $3/ MMBtu MMBtu 0 W. Canada NOLA (US Gulf) U
Slide 27: Benchmark Prices: Urea
Benchmark Prices: Urea 1,000 900 800 700 600 500 400 300 200 100 0 May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- 05 05 06 06 06 07 07 07 08 08 08 09 09 Black Sea NOLA Pacific Northwest Source: Blue, Johnson & Associates, The Market, Green Markets Fundamentals of Growth 26
Slide 28: Phosphate Advantages
Phosphate Advantages North American Phosphate Nutrient Capacity 5,000 4,500 4,307 4,000 3,500 3,000 2,500 2,370 2,000 1,673 1,500 953 1,000 775 720 500 376 0 Mosaic PCS Combined CF J.R. Simplot Agrium Mississippi Agrium/CF Co. Phos Corp. Source: IFDC Worldwide Phosphoric Acid Capacity Listing by Pla
Slide 29: Benchmark Prices: Phosphate
Benchmark Prices: Phosphate 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- 05 05 06 06 06 07 07 07 08 08 08 09 09 Central Florida PNW Source: Blue, Johnson & Associates, Green Markets Fundamentals of Growth 28
Slide 30: Benchmark Prices: Potash
Benchmark Prices: Potash 1,000 900 800 700 600 500 400 300 200 100 0 May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May- 05 05 06 06 06 07 07 07 08 08 08 09 09 Sask Midwest Vancouver Source: Green Markets, Blue, Johnson & Associates, Agrium Fundamentals of Growth 29
Slide 31: Significant Premium to CF Stockholders
Significant Premium to CF Stockholders Premiums (1) Cash Adjusted Premiums (1,2) $85.20 $68.56 Current ($85.20, less $16.64 net offer cash per CF share) 68% 53% 40% 102% 76% 55% $60.88 $44.23 $55.58 $38.94 $50.60 $33.95 30-Day VWAP 2/24 CF Price Unaffected Price (3) 30-Day VWAP 2/24 CF Price Unaffec
Slide 32: Current Nutrient Pricing Above Historical Averages
Current Nutrient Pricing Above Historical Averages • CF’s reliance on short-lived peak 2008 nitrogen and phosphate prices for current and future valuations is unrealistic and irrelevant • Current nitrogen and phosphate prices are NOT at the bottom of the cycle – A return to cyclical commodity lows a
Slide 33: Significant Synergies from Combination of Agrium and CF
Significant Synergies from Combination of Agrium and CF • Anticipate annual synergies of approximately $150 million from Agrium/CF combination, phased in over three years Source Description Sales, Marketing and Consolidation of the sales, marketing and distribution systems by Distribution • utilizin
Slide 34: AGU Proposal at a Significant Premium to Historical CF Trading Values
AGU Proposal at a Significant Premium to Historical CF Trading Values Source: Bloomberg. Daily trading values have been rebased to CF stock price on 15-Jan-09 (date of CF proposal for Terra) 1 AGU Current Proposal for CF: one AGU share plus $40 in cash based on AGU closing price on May 8, 2009. 2 Gl
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