WALL STREET PAYDAY: A handful of banks will making a killing on a huge agriculture deal

Potash Corporation of Saskatchewan and Agrium are merging to create the largest crop nutrient company in the world.

The deal, valued at $27 billion, will also create the third largest natural resources company in Canada.

Bank of America Merrill Lynch and RBC Capital Markets advised Potash Corp. on the deal, while Barclays and CIBC World Markets advised Agrium. Morgan Stanley is a joint financial adviser to both companies.

It is expected that Potash and Agrium will each pay around $40 million to $45 million each in advisory fees, according to the consultant Freeman & Co. That would bring the total fees for the deal to close to $90 million.

The deal is a boost for Canadian banks RBC Capital Markets and CIBC World Markets, which both have strong advisory businesses in the energy sector.

RBC Capital Markets also advised Canadian pipeline company Enbridge on its deal to buy Houston-based Spectra Energy.
That deal, valued at $43.1 billion, is the third biggest announced mergers-and-acquisitions transaction this year, according to Dealogic.

The Potash-Agrium deal is the latest in a series of mega deals involving the global farming sector, including the pending merger of Dow and DuPont, ChemChina’s deal for Swiss seeds and pesticides group Syngenta, and Bayer pharmaceutical’s bid for Monsanto, the world’s largest supplier of crop seeds and genetics.

It also comes hot on the heels of a big week for M&A, with more than $100 billion in deal activity announced in the week starting September 5.

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