The fertilizer industry strengthened on the potential merger activity. Fertilizer companies have suffered from lower profits in recent years after crop nutrient prices fell to multi-year lows on excessive supply and demand and declining commodity prices.
“(A merger) will make them a better force to compete on a global scale,” Mohsin Bashir, portfolio manager at Stone Asset Management Ltd, told Reuters.
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Colin Isaac, an analyst with Atlantic Equities, argued that the potential deal would probably help generate growth and cut costs for both companies, Bloomberg reports.
“People will use this as evidence we’re at the bottom of the cycle,” Isaac told Bloomberg. “It’s probably more about synergies and generating some growth.”
For more information on the agriculture industry, visit our agribusiness category.
Global X Fertilizers/Potash ETF