Merger between CVR Partners and Rentech Nitrogen creates UAN giant

LONDON (ICIS)–A merger between CVR Partners and Rentech Nitrogen Partners will create the second-largest producer of urea ammonium nitrate (UAN) in North America, the pair announced in a statement on Monday.

In a deal valued at $533m, CVR Partners will acquire all outstanding units of Rentech Nitrogen, excluding the firm’s Pasadena facility in Texas, which is now set to be sold.

The agreement comes six months after Los Angeles-headquartered Rentech Nitrogen, which also has a manufacturing site in Illinois, first disclosed it was pursuing strategic alternatives such as a sale or merger.

Kansas-based CVR Partners owns a 1,225 tonne/day ammonia unit and a 3,000 tonne/day UAN plant.

“The addition of Rentech Nitrogen’s East Dubuque fertilizer facility increases our scale and diversifies our geography and raw material feedstock,” said Mark Pytosh, CEO of CVR Partners.

“Our customers will benefit from the expanded availability and variety of nitrogen fertilizer products manufactured at the two facilities.

“The merger also expands our footprint into the upper Corn Belt region, which has the largest concentration of users in the US for the direct application of nitrogen fertilizer products.”

Rentech Nitrogen CEO Keith Forman said his firm was now concentrating on offloading the Pasadena plant: “We believe that the resulting company will benefit from larger scale; diversification of plants, feedstocks, and markets; and reduced costs.

“We intend to immediately return to a focused process to sell the Pasadena facility, before the closing of the merger with CVR Partners,” he added.

Rentech Nitrogen’s plant in Illinois produces ammonia and UAN solution for sale to customers in the Mid Corn Belt.

The Pasadena facility produces ammonium sulphate (AS) and ammonium thiosulphate fertilizers, and sulphuric acid.