DEERFIELD -- CF Industries Holdings Inc., a global manufacturer of hydrogen and nitrogen products, said Monday it has signed a definitive purchase agreement with Incitec Pivot Limited to buy IPL's ammonia production complex in Waggaman, Louisiana, for $1.675 billion.
The facility has a capacity of 880,000 tons of ammonia annually, CF Industries said. Under the terms of the agreement, CF Industries will allocate approximately $425 million of the purchase price to a long-term agreement under which CF Industries will supply up to 200,000 tons of ammonia per year to IPL's Dyno Nobel subsidiary.
CF Industries expects to fund the remaining $1.25 billion of the purchase price with cash on hand.
"We are pleased to reach this agreement with Incitec Pivot Limited that benefits from our industry-leading ammonia production capabilities, deploys our capital efficiently and provides long-term value for both companies' shareholders," said Tony Will, president and chief executive officer, CF Industries Holdings.
Ammonia produced at the Waggaman facility today is distributed ratably to three customers, including Dyno Nobel, with approximately 75% used in industrial applications. The plant has about 90 employees.