Koch Ag & Energy Solutions plans to acquire an Iowa fertilizer plant owned by a Dutch company in a $3.6 billion deal that will turn over complete ownership of the facility.
The Wever, Iowa-based Iowa Fertilizer Company - the plant changing hands in the deal - is currently operated by OCI Global. The 2017 state-of-the-art facility has an annual production capacity of 3.5 million metric tons of nitrogen fertilizers and diesel exhaust fluid.
Based in Wichita, Kansas, Koch Fertilizer, LLC and its affiliates can market and distribute approximately 12 million tons of fertilizer products annually. Mark Luetters, president of Koch Ag & Energy Solutions, said in a release the announcement is an “important step forward” for KAES as it continues to invest in its fertilizer business and complements its existing business portfolio.
Once all closing and regulatory conditions of the acquisition agreement are met, the Wever facility will be added to the existing Koch Fertilizer portfolio, which produces, markets and distributes nitrogen fertilizers, diesel exhaust fluid and phosphate fertilizer products, the company said.
“We’re excited about the opportunity the Wever plant will provide us to better serve existing and new customers with expanded products and services,” said Scott McGinn, executive vice president of Koch Fertilizer.
Koch currently employs nearly 500 people in the state, McGinn added.
Cut through the clutter! We deliver the news you need to stay informed about farm, food and rural issues. Sign up for a FREE month of Agri-Pulse here.
Josh Linville, StoneX vice president of fertilizer, noted the timing of the transaction's announcement is interesting as it comes just days after the introduction of the Fertilizer Research Act from Sens. Chuck Grassley, R-Iowa, Joni Ernst, R-Iowa, and Tammy Baldwin, D-Wis., which would require USDA to conduct a study on competition and trends in the fertilizer market and the impact on prices.
In an email to industry stakeholders, Linville said that lack of competition is a prevalent talking point among retailers and farmers.
“This will be seen as the first ‘challenge’ to it from the buyers’ perspective as it removes a competitor from the marketplace and puts it into the hands of a party that already has a robust foothold in the industry,” Linville said.
For more news, visit Agri-Pulse.com.
