Potash Corp. of Saskatchewan and Agrium confirmed they are discussing a potential merger of equals. No decision has been made as to whether to proceed with such a combination, no agreement has been reached, and there can be no assurance that any transaction will result from these discussions.

The combination would create a giant Canadian-based fertilizer company with a $28 billion market capitalization based on the latest stock prices. This friendly merger would likely face less regulatory scrutiny if it were to move forward because both companies are Canadian based. Other recent takeover bids in the fertilizer space were not friendly and involved companies based in other countries, such as K+S in Germany and BHP in Australia.

PotashCorp is the largest producer, by capacity, of potash and one of the largest producers of nitrogen and phosphate. The merger would give PotashCorp access to Agrium’s retail sales and distribution network.