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Aug. 31, 2016, 5:19 a.m. EDT

Potash has best day in 6 years on deal talks; agriculture ETF extends 2016’s gain

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By Ryan Vlastelica


AFP/Getty Images
Potash Corp. of Saskatchewan Inc. produces crop nutrients used for fertilizer.

Shares of Potash Corp. of Saskatchewan Inc.  soared on Tuesday, notching their biggest one-day advance in more than six years after the company confirmed that it was in preliminary talks for a possible merger of equals with Agrium Inc. .

The prospect of a blockbuster deal in the sector boosted the agriculture space, sending both peer companies and the VanEck Vectors Agribusiness exchange-traded fund /zigman2/quotes/206860533/composite MOO +1.16%  higher on the day. The ETF, which is a popular way for investors to play the broader sector, saw its most active session since last September.

A deal between Potash and Agrium could create a company with a total market value of more than $28 billion. Earlier on Tuesday, Bloomberg News reported that the pair were in advanced talks, with an official announcement potentially coming this week.

Shares of Potash closed up 10.8%, their biggest single-session rise since August 2010, with more than 46 million shares of the company traded. Agrium shares rose 7% in their biggest one-day advance since October 2014.

The VanEck fund rose 0.9%, with more than 1.1 million shares exchanging hands. The fund has been in an uptrend of late, having risen in 12 of the past 18 sessions. It is up 9.5% year to date, outperforming both the S&P 500’s 6.5% rise and the Dow Jones Industrial Average’s 6.2% gain.

Agrium and Potash each make up about 4% of the VackEck ETF’s holdings, according to FactSet data.

Among other names in the space, Mosaic Co. /zigman2/quotes/203825795/composite MOS +1.27%  rose 8.9% as the top-gaining S&P 500 component of the day, while CF Industries Holdings Inc. /zigman2/quotes/209482112/composite CF +3.03% added 4.8%. Mosaic comprises 2.75% of the VanEck fund, while CF represents about 1.68% of the fund’s portfolio, according to FactSet data.

/zigman2/quotes/206860533/composite
US : U.S.: NYSE Arca
$ 96.44
+1.11 +1.16%
Volume: 799,731
May 16, 2022 4:10p
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/zigman2/quotes/203825795/composite
US : U.S.: NYSE
$ 63.08
+0.79 +1.27%
Volume: 6.25M
May 16, 2022 4:04p
P/E Ratio
8.93
Dividend Yield
0.71%
Market Cap
$22.55 billion
Rev. per Employee
$1.12M
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/zigman2/quotes/209482112/composite
US : U.S.: NYSE
$ 107.01
+3.15 +3.03%
Volume: 3.19M
May 16, 2022 4:03p
P/E Ratio
13.80
Dividend Yield
1.50%
Market Cap
$21.67 billion
Rev. per Employee
$2.79M
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