Landmark growth initiative

(2008-07-15) Yara has agreed to acquire Canadian nitrogen producer Saskferco for CAD 1.6 billion in enterprise value. The landmark transaction strengthens Yara's production and marketing position in North America and serves as a solid platform for further growth and value creation.

Through this transaction, Yara will acquire a world-class nitrogen
manufacturing plant near Belle Plaine, Saskatchewan, in Canada and storage
facilities in Saskatchewan and Manitoba. The Saskferco plant is one of the
world's most gas efficient producers of ammonia, urea and UAN, with
strategic proximity to western Canada's large and cost competitive gas
reserves. When completed, the deal will add 650,000 tons of ammonia,
980,000 tons of urea and 230,000 tons of UAN in annual production capacity.
In addition to this, current capacity expansion projects will increase
ammonia and urea production to 725,000 and 1,115,000 tons annually from mid 2009 for an investment cost of CAD 84 million. Natural gas supply to the
plant is linked to AECO Hub, which has historically been priced lower than
Henry Hub.

"This acquisition represents another significant step in Yara's growth
strategy, and Saksferco's production and distribution capabilities are an
excellent strategic fit with our existing assets in North America. It
provides a strong foundation for further growth through an efficient
manufacturing facility located close to major gas production and with
proximity to an important regional agricultural market for urea and UAN",
says CEO and President of Yara International ASA, Thorleif Enger.

Saskferco, a private company owned 50 % by the Mosaic Company, 49 % by the provincially owned Investment Saskatchewan and 1 % by Canadian Imperial Bank of Commerce (CIBC), was established in 1988. The nitrogen
manufacturing facility in Saskatchewan was completed in 1992, with a
capacity expansion in 1997, which made it the largest urea granulation unit
in North America. In 2004 a UAN plant was added to the facility and in 2007
a new expansion project was started to further boost ammonia and urea
production. The company, which has approximately 150 employees, generated
revenues of CAD 505 million and an EBITDA of CAD 202 million for fiscal
year ended 31 May 2008.

The transaction, which will be funded through existing credit lines, is
expected to close in Q3 2008, subject to fulfilment of closing conditions
including approval by the relevant regulatory authorities in Canada and the
United States.