For over a year, the fertilizer industry has been consumed by a three way war between Agrium (NYSE:AGU), CF Industries (NYSE:CF) and Terra Industries (NYSE:TRA). That love hate triangle has finally come to rest.

IN PICTURES: Eight Ways To Survive A Market Downturn

More Money, More Money
It all began with CF making an offer to buy out rival nitrogen producer Terra Industries. Shortly thereafter, Canada's Agrium came in with an offer for CF contingent upon CF dropping its pursuit for Terra. For nearly a year, that never happened. Instead, each target company did what you would expect them to do: publicize that the offer was too low. Thus followed months of increased bids, hostile attempts to woo shareholders from the other side, and insistence on board seats. It was your typical merger & acquisitions 101 drama.

In the End, Much Ado About Nothing
Earlier this year, CF dropped its bid for Terra as the two sides could not agree to terms. It appeared that this had opened the door for Agrium to potentially find a way to acquire CF despite the fact that CF still found Agrium's offer too low. Several weeks later, Norwegian fertilizer group Yara offered to buy Terra for approximately $41 a share. Shortly thereafter, CF came in with a superior bid of approximately $4.7 billion or $47 a share in cash and stock. Terra agreed to the offer after Yara refused to increase its bid. At the same time, Agrium announced that it was dropping its efforts to take over CF Industries. So in the end, all ended the way it started. (For more, see The Wonderful World Of Mergers.)

The Silver Lining
The silver lining for investors is that all the merger mania suggests that the fertilizer industry is due for a nice rebound. After a couple of years of declining grain prices, farmers seem to be reacting to the need to replenish depleting soil. While owning the shares outright might offer greater exposure, investors can also participate by owning the only other thing farmers need more than soil: seeds. And no one dominates that business more than Monsanto (NYSE:MON). With farmers coming back after years of working down existing inventory, agriculture has some sunny days ahead. (For more, see The Merger - What To Do When Companies Converge.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  2. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  3. Economics

    Long-Term Investing Impact of the Paris Attacks

    We share some insights on how the recent terrorist attacks in Paris could impact the economy and markets going forward.
  4. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  5. Markets

    PEG Ratio Nails Down Value Stocks

    Learn how this simple calculation can help you determine a stock's earnings potential.
  6. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  7. Investing

    What’s the Difference Between Duration & Maturity?

    We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
  8. Trading Strategies

    How to Trade In a Flat Market

    Reduce position size by 50% to 75% in a flat market.
  9. Economics

    Is Wall Street Living in Denial?

    Will remaining calm and staying long present significant risks to your investment health?
  10. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  1. How do mutual funds work in India?

    Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>
  2. What does low working capital say about a company's financial prospects?

    When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
  3. Do nonprofit organizations have working capital?

    Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
  4. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  5. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  6. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>

You May Also Like

Trading Center