CF Industries Completes Acquisition of US Ammonia Facility in Waggaman
US fertilizer producer CF Industries has completed the acquisition of the ammonia production complex of Incitec Pivot Limited (IPL) in Waggaman, Louisiana, USA, for $1.675 billion.
The companies allocated approximately $425 million of the purchase price to a long-term ammonia offtake agreement under which CF Industries will supply up to 200,000 t/y to IPL’s Dyno Nobel subsidiary. CF Industries said that it funded the remaining purchase price with cash on hand.
“We are pleased to grow our industry-leading ammonia production capabilities with the addition of IPL’s Waggaman ammonia production facility and team,” said Tony Will, president and CEO of CF Industries. “This transaction deploys our capital efficiently, delivering immediate profitable growth by adding one of the newest ammonia production units in North America into our existing network while advancing our long-term strategic focus on low-carbon ammonia as a clean energy source,” Will added.
Along with its offtake agreement with IPL, CF Industries will continue to fulfill medium- and long-term offtake agreements with two customers that were in-place prior to the acquisition. The company expects these contracts to generate a gross margin per ton equivalent to that of the existing ammonia segment, before the higher capacity utilization and operational and logistical optimization that CF Industries intends to achieve with the integration of the site into the company. Additionally, CF Industries plans to implement carbon capture and sequestration (CCS) technologies at the site on an accelerated timeline, increasing its network’s low-carbon ammonia production capability.
