Shares of the Saskatoon-based fertilizer producer rose 1.6 per cent in early New York trading, touching a three-week high.

Revenue was lower in the first quarter due to weaker prices year over year, but it still exceeded Wall Street’s expectations.

Potash prices have rebounded modestly since last year but remain low due to bloated global capacity and weakening farm incomes. Even so, PotashCorp forecast global potash demand of 61 million to 64 million tonnes this year, exceeding last year’s 60 million tonnes.

Potash said it expected full-year earnings of 45 cents to 65 cents per share, up from its prior forecast of 35 cents to 55 cents.

The company raised the lower end of its estimate for 2017 potash sales to 8.9 million tonnes from 8.7 million tonnes, keeping the upper end at 9.4 million tonnes.

“We expect improved consumption trends and nutrient affordability in key markets to support potash demand and our results through the remainder of 2017,” CEO Jochen Tilk said in a statement.

Bernstein analyst Jonas Oxgaard said earnings benefited from a lower tax rate as well as stronger sales in China, India and North America.

“(It) suggests the potash price recovery is in strong force,” he said in a note.

But Citi analyst P.J. Juvekar said it was too early to envision a major recovery as rivals bring on new potash mines through next year.

PotashCorp has nearly finished expanding its low-cost Rocanville, Sask. mine, which it says will help it weather weak crop nutrient prices.

In September, PotashCorp and rival Agrium announced plans to merge. The deal would combine PotashCorp’s fertilizer capacity, the world’s largest, and Agrium’s farm retail network, North America’s biggest.

Tilk said the companies were working through the regulatory process and still expect the deal to close in mid-2017.

Net earnings nearly doubled to $149 million, or 18 cents per share, in the quarter, beating the analysts’ average estimate of 11 cents.

Revenue fell eight per cent to $1.11 billion, despite a 13 per cent rise in potash sales volumes.

Analysts on average had expected $1.06 billion, according to Thomson Reuters I/B/E/S.

— Reporting for Reuters by Swetha Gopinath in Bangalore and Rod Nickel in Winnipeg.

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DuPont, which is merging with Dow Chemical Co, continues to expect to close its merger in August, Chief Executive Ed Breen said in a statement.

Regulatory hurdles have repeatedly delayed closing of the merger, which was announced in December 2015.

Any further asset sales required to win regulatory clearance would be “small, nothing of significance”, Breen told Reuters.

DuPont said last month it would swap assets with FMC Corp , acquiring nearly all of FMC’s health and nutrition business, while divesting a portion of its crop protection business.

The divestiture was made to win European Union approval for the company’s merger with Dow Chemical.

The companies were “progressing well” on pending regulatory approvals, Breen said.

The deal is yet to be approved by the United States and China, among others.

Sales in DuPont’s agriculture unit, which accounts for half of the company’s revenue, rose 4 percent to $3.93 billion in the first quarter ended March 31, while operating earnings increased 12 percent.

The seeds and chemicals maker is now focusing on selling directly to farmers in the United States, reducing its links with U.S. retailers and distributors.

The switch has pushed the timing of some seed sales to the first quarter from the fourth.

Demand was also propelled by late-season seed demand in South America and the planting of the largest combined corn and soybean acres on record in the United States.

DuPont on Tuesday forecast operating earnings of $2.90 per share for the first half of the year.

Given that the company’s first-quarter operating profit was $1.64 per share, above analysts’ average estimate of $1.39, the company is likely to post $1.26 in the current quarter.

That is lower than the $1.31 analysts are expecting, according to Thomson Reuters I/B/E/S.

A shift to more-profitable soybean among U.S. farmers is expected to weigh on demand for corn seeds, which make up a bulk of the DuPont’s agriculture sales.

Corn sales accounted for 47 percent of sales in DuPont’s agriculture unit in 2016, while soybean made up only 16 percent.

Net income attributable to DuPont fell nearly 10 percent to $1.11 billion in the first quarter, hurt by one-time charges.

Net sales rose 4.6 percent to $7.74 billion, beating estimates of $7.50 billion.

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The seeds and chemical maker said improving growth in the United States, Latin American and Europe, besides steady Asia growth, would boost demand in its packaging, consumer care, electronics, automotive and agriculture businesses.

Dow’s shares rose as much as 2.38 per cent to a record high of $61.64 on Thursday (all figures US$).

“We are seeing early signs of positive economic momentum, with the United States in expansionary mode, driven by the ongoing strength of the consumer and the tailwind of a new incoming administration promising structural reforms,” CEO Andrew Liveris said in a statement.

Liveris was appointed by U.S. President Donald Trump to lead a private-sector group on manufacturing that will advise the U.S. secretary of commerce.

Dow has been targeting cost savings of $3 billion after its merger with DuPont, but jobs cuts would be needed to help meet that target, Liveris said on a post-earnings call.

“We don’t fit the presidential agenda right away,” he said, referring to Trump’s call to create more U.S. jobs. Liveris, however, expects the Trump administration “to move fast on taking out regulatory costs and give us better tax regimens.”

Dow and DuPont’s $130 billion deal, announced in December 2015, has drawn regulatory scrutiny, particularly in the European Union. The main concerns stem from an overlap in their seeds and crop protection businesses.

Liveris said the companies were confident of addressing the EU’s concerns about crop innovation.

The deal is now expected to close in the first half of 2017, compared with their previous expectation of a first-quarter close.

Dow forecast first-quarter revenue of $12.25 billion to $13.25 billion, higher than analysts’ average estimate of $11.77 billion, according to Thomson Reuters I/B/E/S.

Dow’s move to take full control of its Dow Corning venture, a silicone business that was previously a joint venture with Gorilla glass maker Corning, and its focus on consumer markets helped boost its results in the fourth quarter.

Dow swung to a net loss due to a one-time $1.1 billion charge, reflecting a change in the way the it accounts for legal costs associated with defending against asbestos claims.

But, its operating profit of 99 cents per share sailed past analysts’ average estimate of 88 cents.

Net sales rose nearly 14 per cent to $13.02 billion, also trumping expectations of $12.38 billion.

— Reporting for Reuters by Swetha Gopinath and Arathy S Nair in Bangalore.

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Dupont and Dow plan to form a giant chemical and seed producer that would have a market value of about US$95 billion at current share prices.

The combined company will then split into three businesses, focused on agriculture, materials and specialty products.

Analysts have said regulators were likely to be especially concerned about the combination of the companies’ agricultural businesses, although company executives have said their businesses have little overlap.

“We feel there is very little overlap, despite the size of the companies,” Breen reiterated in a telephone interview with Reuters on Tuesday.

DuPont has begun the process of addressing the requirements under various competition laws, Breen said earlier on a call to discuss the company’s fourth-quarter earnings, which slightly beat market expectations.

— Reporting for Reuters by Swetha Gopinath in Bangalore; additional reporting by Amrutha Gayathri.

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Potash Corp said it was putting its new Picadilly mine near Sussex, about 75 km northeast of St. John, in “care and maintenance” mode, resulting in the loss of 420 to 430 jobs.

Potash prices have fallen sharply over the past year, under pressure from bloated capacity, soft grain prices and weak currencies in major consumers such as India and Brazil, one of PotashCorp’s largest customers.

“We don’t see in the short term how things will turn around quickly that would change the environment,” CEO Jochen Tilk said in an interview.

“We are repositioning the company in light of that but we are still optimistic on the long-term prospects for our business,” he said.

Saskatoon-based PotashCorp’s stock was 60 cents firmer at $23.63 on the TSX on Tuesday. The stock is down 45 per cent in the past 12 months.

As demand for potash has fallen worldwide, PotashCorp, the world’s biggest fertilizer company by capacity, has in recent months closed its nearby Penobsquis potash mine and suspended production at three mines in Saskatchewan. PotashCorp’s other New Brunswick mine, at nearby Cassidy Lake, was shut down in the late 1990s.

PotashCorp, which had more than 5,000 employees worldwide at the end of 2014, said it would retain 35 employees at Picadilly to keep the operation in “care-and-maintenance,” while another 100 are to stay on through a four-month “transitional period.”

The Picadilly mine, built between 2008 and 2014, would take about a year to restart if PotashCorp decides to resume its operations, the company said.

About 100 affected New Brunswick employees could be relocated to the company’s Saskatchewan sites, PotashCorp added.

PotashCorp said it expected to recognize severance and transition costs of about $35 million in the first quarter as a result of suspending operations at Picadilly.

PotashCorp said its customers “historically served” via New Brunswick will now be served from Saskatchewan through Canpotex, the joint potash export arm it operates with Agrium and Mosaic Co.

PotashCorp’s port terminal at St. John will also be made available to Canpotex, the company said.

The suspension would help PotashCorp to reduce its full-year cost of goods sold by $40 million to $50 million and would eliminate capital expenditures of about $50 million in 2016 and $135 million in 2017-18, the company said.

— Reporting for Reuters by Swetha Gopinath in Bangalore and Nicole Mordant in Vancouver. Includes files from AGCanada.com Network staff.

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The deal to combine two of the biggest and oldest U.S. chemical producers is a prelude to an eventual split-up of the combined company into three discrete businesses, Dow and DuPont said on Friday.

But it is likely to face intense regulatory scrutiny, given an extensive overlap of their agriculture businesses.

The proposed split would create businesses focused on agriculture, materials and specialty products.

Excluding preferred shares, existing shareholders of Dow and DuPont will each own about 50 per cent of the combined company, to be called DowDuPont.

DuPont CEO Ed Breen will be CEO of the new company, and Dow CEO Andrew Liveris will be executive chairman.

Dow Chemical shareholders will get one DowDuPont share for each Dow Chemical share held, while DuPont shareholders will get 1.282 shares in DowDuPont for each DuPont share they own.

The merger, one of the biggest of the year, will allow Dow and DuPont to rejig assets based on the diverging fortunes of their businesses that make agriculture chemicals and plastics.

The companies have been struggling to cope with falling demand for farm chemicals due to falling crop prices and a strong dollar, even as their plastics businesses have thrived thanks to low natural gas prices.

DuPont shares were down 4.4 per cent at $71.25 in premarket trading, while Dow’s were down 1.8 per cent at $53.92 (all figures US$).

Focus on competitors

“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” Liveris said in a statement.

Dow and DuPont, whose Canadian agribusinesses are headquartered in Calgary and Mississauga respectively, said the split would “occur as soon as feasible” and would likely happen 18-24 months after the deal closes, which is expected in the second half of 2016.

The combination will help the companies save about $3 billion in costs in the first two years, with the possibility of saving another $1 billion, Dow and DuPont said.

The biggest of the three new companies by revenue would be a material science company, which would cater to the packaging, transportation and infrastructure industries.

The combined revenue for the materials business was about $51 billion in 2014 on an adjusted basis.

The companies said a new specialty products company would focus on electronics. The combined adjusted revenue of that business was about $13 billion in 2014.

The third business, selling seed and crop protection chemicals, generated adjusted revenue of about $19 billion.

The merger puts further pressure on rivals such as Germany’s BASF and Bayer to consolidate as falling crop prices curb sales.

It could also prompt a renewed flurry of takeover bids for European rivals, with Syngenta the most likely target.

Analysts have said a Dow-DuPont tie-up might push Monsanto to take another shot at Syngenta after the U.S. company abandoned a $45 billion offer for the Swiss company in August.

“The biggest impact will certainly be in the agriculture market, where the seeds and crop chemical industries are to undergo rapid consolidation,” SunTrust Robinson Humphrey analyst James Sheehan told Reuters on Friday.

“(The question is) how does Monsanto respond to the strategic move by two of its main competitors?”

Activist investor Nelson Peltz, who has long championed breaking up stodgy conglomerates, has been pressing DuPont to separate its agriculture, nutrition and biosciences units from its building and safety materials divisions.

Investor Dan Loeb, meanwhile, has been pushing Dow to split its agribusiness and other specialty chemical units from its petrochemical divisions.

Pre-merger restructuring

DowDuPont’s board is expected to have 16 members, with each company contributing eight directors, the companies said.

The 118-year old Dow makes plastics, chemicals, hydrocarbons, and agrichemicals. It makes Styrofoam insulation products and chlorine products used in paper, pulp and soap. Dow also will assume full control of silicone products maker Dow Corning, its joint venture with Corning Inc.

DuPont, which is 213 years old, makes products used in petrochemicals, pharmaceuticals, food and construction. Its brands include Kevlar and formerly Teflon, now part of Chemours, which it had spun off.

DuPont, in another statement, said it would cut costs by $700 million in 2016, affecting 10 percent of its global workforce.

— Reporting for Reuters by Swetha Gopinath, Sneha Banerjee and Darshana Shankaraman in Bangalore.

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Stocks of both companies jumped 12 per cent on Wednesday — Dow’s to a record high of $56.80 (all figures US$). DuPont hit a high of $74.62.

The Wall Street Journal first reported Tuesday that the companies were in advanced talks to merge to become a $120 billion chemicals giant, then split into three companies focused on agriculture, specialty chemicals and materials.

“I think a deal like this couldn’t have happened three to six months ago,” said Sachin Shah, a merger arbitrage strategist at Albert Fried and Co., noting the companies’ sluggish stock performance had made a deal more doable.

Dow CEO Andrew Liveris said as recently as October that his company was not in the market for “big M+A.”

The deal, which Reuters sources and other media said would be presented as a “merger of equals,” would value DuPont’s stock at as much as $82 and Dow’s at as much as $68, trading firm Dragonfly Capital founder Greg Harmon said.

Dow and DuPont are struggling to cope with falling demand for farm chemicals, even as the companies’ plastics units have reported a rise in margins thanks to low natural gas prices.

Reports of the potential deal comes a week before the expiry of a standstill agreement between Dow and Daniel Loeb, under which the activist investor was to refrain from publicly criticizing the company for a year.

Dow added four independent directors to its board in November 2014, averting a proxy fight with Loeb, who had been calling for a split of the company’s petrochemical business from its specialty chemical units.

DuPont, similarly, faced pressure from Nelson Peltz to separate its agriculture, nutrition and biosciences units from its building and safety materials divisions.

Peltz lost a proxy battle for DuPont’s board seats in May, but CEO Ellen Kullman stepped down in October, having lost the confidence of the company’s shareholders.

Her successor, Ed Breen — known for overseeing the breakup of conglomerate Tyco International — was key in getting talks going with Dow, analysts and investors said.

— Reporting for Reuters by Swetha Gopinath and Kanika Sikka in Bangalore.

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Falling crop prices and rising fertilizer output have triggered talk of consolidation among farm-focused companies.

DuPont has been touted as a potential buyer of Dow’s farm unit, but some have questioned if the company is in a position to do so.

Breen took over earlier this month after Ellen Kullman abruptly stepped down from her post.

Asked on a post-earnings call if DuPont was looking to sell its farm unit, he said, “We will do what’s right for our shareholders to create value for them.”

Breen did not commit to a sale or a purchase at the farm unit, which accounted for 22 per cent of DuPont’s total revenue in the third quarter ended Sept. 30.

“We would be shocked if DuPont’s management team did not at least look at Dow’s (Dow AgroSciences) business — a large agriculture business like Dow’s rarely changes owners,” said Grayson Witcher, a portfolio manager at Mawer Investment Management Ltd. Mawer owns DuPont shares.

Nelson Peltz’s Trian Fund Management, which lost a proxy battle for DuPont’s board seats in May, has said DuPont can save $2 billion to $4 billion in annual costs by separating its volatile materials businesses from more stable businesses (all figures US$).

DuPont would take a “fresh look” at its “cost structure and capital allocation strategy,” Breen said.

The chemicals and seed producer is already targeting about $1.6 billion in annual savings by 2017.

DuPont could raise its cost-cutting target by 10-20 per cent, SunTrust Robinson Humphrey analyst James Sheehan said.

Cost cuts made up 10 cents of DuPont’s third-quarter operating earnings of 13 cents, which beat the average analyst estimate of 10 cents.

Sales fell 17.5 per cent to $4.87 billion, missing analysts’ average estimate of $5.3 billion.

DuPont expects 2015 sales to fall by 11-12 per cent, with sales falling in five out of six units in the current quarter.

The company, which gets about 60 per cent of its sales from outside North America, has seen a strong dollar chip away 53 cents per share from its earnings this year.

Fourth-quarter operating profit will likely be reduced by 19 cents per share, more severe than the 17 cents impact noted in the third.

— Reporting for Reuters by Swetha Gopinath, Sneha Banerjee and Amrutha Gayathri in Bangalore.

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Dow is also selling its stake in a Kuwaiti JV that produces a chemical used in polyester production and planning to cut its holding in another Kuwaiti JV that makes petrochemical products.

Shares of the company, which raised its quarterly dividend, rose as much as 8.4 per cent on Thursday.

Dow embarked on a massive restructuring in 2013, shrinking its low-margin commodity chemical businesses, including its century-old chlorine unit, to focus on more lucrative specialty chemicals used in electronics and packaging.

Falling crop prices and rising fertilizer output have triggered consolidation among farm-focused companies.

“Everyone is talking to everyone,” Dow CEO Andrew Liveris said on a conference call.

Dow’s best option may be to merge its agri unit, Dow AgroSciences, with Monsanto or Dupont — or sell it altogether, SunTrust Robinson Humphrey analyst James Sheehan said.

Monsanto is looking to grow through acquisitions after its failed bid for Syngenta. Speculation of a tie-up between Dow’s agri unit and Dupont intensified this month after Dupont CEO Ellen Kullman stepped down.

In January last year, activist investor Dan Loeb had called on Dow to split its agribusiness and other specialty chemical units from its petrochemical divisions.

Restructuring JVs

To simplify its structure, Dow has been trying to cutting down on the number of its JVs.

The company is in talks “around a potential transaction involving Corning’s ownership” in Dow Corning, Liveris said, adding that the JV had become a “much more logical fit” for Dow.

Dow Corning, formed in 1943, produces silicon-based products for aerospace, automotive and electrical industries.

Dow said it raised $1.5 billion in pretax proceeds from the sale of its stake in MEGlobal, its JV with Petrochemical Industries of Kuwait, and planned to cut its holding in another Kuwaiti JV, Greater EQUATE (all figures US$).

Dow also appointed vice-chairman Jim Fitterling its chief operating officer and promoted chief financial officer Howard Ungerleider to vice-chairman.

The company’s operating profit rose 14 per cent to 82 cents per share in the third quarter, beating the average analyst estimate of 69 cents, as raw material costs fell.

Revenue fell 16 per cent to $12.04 billion, missing analysts’ expectations of $12.38 billion, according to Thomson Reuters I/B/E/S.

— Reporting for Reuters by Swetha Gopinath and Sneha Banerjee in Bangalore.

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The price of potash has plunged year over year, triggered by the breakup last year of trading partnership Belarusian Potash Co. that created more competition among producers.

PotashCorp, the world’s biggest fertilizer company by market value, said the average realized price for potash fell 8.5 per cent to $281 per tonne in the third quarter from a year earlier.

Potash prices rose seven per cent from the second quarter, however, and sales volume jumped 29 per cent from a year earlier.

PotashCorp said the global potash industry was now expected to ship 58 to 60 million tonnes in 2014, more than the 56.5-58 million it had estimated earlier.

Global potash demand in 2015 looked to reach similar levels, despite a drop in crop prices, said CEO Jochen Tilk.

“While we expect lower farm profitability still has the potential to impact demand in certain regions, we also believe crop pricing remains within the band that is supportive of farmer economics and fertilization,” he said.

U.S. farmers have used less fertilizer this autumn due to lower crop prices and a delay in harvest.

Even so, fundamentals are improving, said Jeffrey Nelson, analyst at Edward Jones.

“It’s a slow slog through. They’re still digesting what happened (with BPC) last summer, but fundamentals are getting better for sure.”

PotashCorp, which also makes phosphate and nitrogen fertilizers, narrowed its 2014 forecast profit to $1.75-$1.85 per share from $1.70-$1.90, citing a reduction in estimated income from offshore investments and a higher tax rate.

The company’s investments in Israel Chemicals Ltd., Arab Potash Co. PLC and Chile’s SQM accounted for eight per cent of its profit in the third quarter, down from 24 per cent a year earlier.

The company cut its forecast for full-year income from offshore investments to $205 million-$215 million from $230 million-$240 million. It also raised its effective tax rate for the year ending December to 27-29 per cent from 26-28 per cent, citing a tax change in Chile.

PotashCorp’s net income fell 11 per cent to $317 million, or 38 cents per share, in the third quarter. The company’s profit was hurt also by a 34 per cent rise in tax expenses.

Revenue increased eight per cent to $1.64 billion.

Analysts on average had expected a profit of 42 cents per share and revenue of $1.52 billion, according to Thomson Reuters I/B/E/S.

— Reporting for Reuters by Swetha Gopinath in Bangalore and Rod Nickel in Winnipeg.

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