Agribusiness sector-specific exchange traded funds bounced Tuesday, rallying on a potential tie-up between Canada’s Agrium Inc (NYSE: AGU) and Potash Corp of Saskatchewan Inc. (NYSE: POT).
Among the best performing ETFs on Tuesday, the Global X Fertilizers/Potash ETF (NYSEArca: SOIL) rose 2.1% and the broader Market Vectors Agribusiness (NYSEArca: MOO) and PowerShares Global Agriculture Portfolio (NYSEArca: PAGG) were 1.1% and 2.4% higher, respectively.
Potash Corp, the world’s largest crop nutrient company by capacity, and Agrium, North America’s largest farm retailer, said in separate statements that talks were at “preliminary” stages over a possible merger of equals, reports Rod Nickel for Reuters.
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AGU shares jumped 6.0% and POT shares surged 11.8% on the potential union.
AGU makes up 4.7% of SOIL’s underlying holdings, 4.2% of MOO and 7.9% of PAGG. POT accounts for 4.6% of SOIL, 4.0% of MOO and 7.8% of PAGG.
SOIL provides targeted exposure to fertilizer producers around the world. The broader MOO includes companies involved in agri-chemicals, animal health, fertilizers, seeds and traits, farm/irrigation equipment and farm machinery, along with agricultural products, agriculture and fishing and livestock plantations. PAGG also takes broad coverage of agriculture and farming related businesses.
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