Poland’s ZAT, ZAP sign pre-merger agreement to form major ferts group

15 November 2012 11:03  [Source: ICIS news]

LONDON (ICIS)--The managements of Poland's Zaklady Azoty Tarnow (ZAT) and Zaklady Azotowe Pulawy (ZAP) have signed a pre-merger agreement for the creation of Grupa Azoty, a company that will be Europe’s second largest fertilizer producer, the two firms said on Thursday.

An equal number of representatives from ZAT and ZAP would be elected to the supervisory board of Grupa Azoty, according to the agreement for a “merger of equals”, the companies added.

The consolidation of ZAT and ZAP into one company would be carried out in two stages, with the first phase to begin after ZAT uses a capital increase to fund the purchase of 50.7% of ZAP held by Poland's treasury ministry at a rate of 2.5 ZAT shares per ZAP share, the firms said.

The first stage would involve efforts to maximise cost savings, build up a comprehensive and flexible portfolio of fertilizers, expand the ammonia and nitric acid capacities and optimise logistics, the pre-merger agreement states.

The second stage would be detailed at a later date, although it would take into account that ZAT has agreed in the pre-merger agreement that its capital resources should be used to help fund a list of investment projects submitted by ZAP, the companies added.

Poland’s treasury ministry will be the controlling shareholder of Grupa Azoty, which apart from fertilizers will also producer caprolactam, polyamide 6 (or nylon 6), oxo-alcohols and titanium dioxide.

By: Will Conroy
+44 20 8652 3214

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