The new acting chief executive of Norwegian fertilizer firm Yara International said he was “surprised” that CF Industries of the US has suddenly backed out of talks aimed at merging the two firms. Torgeir Kvidal thinks CF cut off the talks too early.
“This was surprising,” Kvidal told newspaper Dagens Næringsliv (DN) Friday morning after CF had sent out a statement to the stock exchanges that CF’s board had decided to end the merger negotiations that began last summer.
Kvidal, who had been involved in the talks from the beginning when he was still Yara’s chief financial officer, told DN that “we had talks with them just earlier this week. When we adjourned, I felt we were still at a relatively early stage. We concentrated on synergies and strategy.” He seemed unsure of what exactly led CF to end the merger project, noting that “CF made this decision.” While both firms recognized synergies between them, they had yet to establish a foundation for future strategy, he said, adding that “we also had some differing impressions of the market that could affect valuations, but we hadn’t really begun to discuss valuation.”
News that the merger was off initially caused Yara’s stock to dive, but it recovered later in the day and shares had gained 2.28 percent by 4pm. Analysts had called the proposed merger “a good match” but were mixed on what the collapse means. Both companies assured markets that their individual values remained intact, but Kvidal, just a week into his job after his predecessor Jørgen Ole Haslestad was fired last week, called the collapse “sad.”
“We saw considerable value here,” Kvidal told DN. “You get disappointed when you don’t reach your goal.”
The merger talks that now appear to have been in vain also cost Yara its hand-picked initial replacement for Haslestad, Norsk Hydro chief executive Svein Richard Brandtzæg. He backed out of taking over as top boss at Yara because of uncertainty tied to the merger talks, which emerged after he’d agreed to take the job and in which he was not involved.
newsinenglish.no staff
