Canadian rivals Agrium Inc and Potash Corp of Saskatchewan agreed Monday to merge to create a $36 billion (32 billion euro) global fertilizer giant in the latest agribusiness mega-merger sparked by low crop prices.

The new company will combine potash, nitrogen and phosphate production with a global distribution network, employing nearly 20,000 people, and will generate $500 million (445 million euros) in annual savings from their combined operations, a joint statement said. The all-stock deal will create the largest crop nutrient company in the world, the companies said.

According to analysts, the merger will create a company dominant in North America, controlling nearly two-thirds of potash capacity, 30 percent of phosphate production capability and almost 30 percent of nitrogen capacity.

The deal would be the latest in a string of agriculture merger attempts, including potential combinations of seed giants Monsanto Co and Bayer AG, and ChemChina and Syngenta.

Fertilizer companies have suffered lower profits as crop nutrient prices have tumbled due to excessive supply and weak demand.

Crop prices have also been hurt, with corn and wheat at seven-year and 10-year lows respectively, giving farmers less incentive to maximize production with fertilizer.

Potash Corp shareholders will get 0.400 common shares of the combined company for each share they hold and Agrium shareholders will get 2.230 common shares for each share they own, the companies said on Monday.

Regulatory hurdles

Canadian and US regulators will scrutinize the deal over concerns about reduced competition and potentially higher costs for farmers. Roger Johnson, president of the National Farmers Union, has said that his group would ask US antitrust enforcers to stop the proposed merger.

The combined company would have had 2015 net revenue of about $20.6 billion (18.34 billion euros) and earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.7 billion (4.2 billion euros) before synergies, on a proforma basis, the companies said.

Agrium Chief Executive Chuck Magro will lead the combined company. Potash Corp CEO Jochen Tilk will be its executive chairman.

Following the close of the transaction, the new company will be headquartered in Saskatoon, with Canadian corporate offices in both Calgary and Saskatoon.

tko/gb (rtr, afp)