Oslo | Reuters — Norwegian fertilizer maker Yara International has fired its CEO Joergen Ole Haslestad, saying he was unsuitable to lead merger talks with Chicago-based CF Industries — talks which would continue under its finance chief.
Yara and CF said last month they were in early-stage talks about a “merger of equals” that would create a US$27 billion rival to the world’s No. 1 fertilizer producer, PotashCorp. Details of any deal have not been revealed.
Yara chairman Leif Teksum told Reuters the board wanted an executive who could lead merger talks with CF and who could have a role in a merged company. Haslestad was originally set to retire next year after leading Yara since 2008.
“Since Haslestad wasn’t going to play any (post-merger) role, we believed it was important to put in place a person who was capable of delivering the merger conditions we’d potentially agree on,” Teksum said.
Haslestad did not oppose the merger talks, the chairman said, nor were there concerns about Yara’s business performance under his leadership.
Chief financial officer Torgeir Kvidal will take over as acting CEO and will lead the Yara team conducting the talks.
“He is a well known and respected person and I think he can do a good job as acting chief executive,” said Anne Gjoen, an analyst at Handelsbanken, though she questioned the timing of the move.
“I must say that it’s a little surprising that this happens now,” said Gjoen. “He (Haslestad) was going to quit soon anyway.”
The deal would give Yara, the world’s biggest nitrate fertilizer maker, major production units in the U.S., where costs are lower due to cheap gas. CF would gain a global footprint through Yara’s presence in 150 countries with production assets and a well established distribution network.
Potentially the biggest hurdle to any deal would be the Norwegian government, which owns a 36.2 per cent stake in Yara.
The government said in June it would not cut its stake below 34 per cent and any change in that stance would likely require approval in parliament, which could be an uphill battle as the government rules in a minority and relies on opposition parties to push through its agenda.
The two companies’ combined stock market capitalisation of US$27 billion would put it almost on a par with Saskatoon-based PotashCorp, worth $27.5 billion.
Haslestad is effectively the second CEO casualty since the merger talks were announced last month. Yara had named aluminium producer Norsk Hydro CEO Svein Richard Brandtzaeg to run the group from early 2015, but he turned down the role after learning about the merger plan.
— Joachim Dagenborg and Gwladys Fouche report for Reuters from Oslo.