The Ministry of Commerce of the People's Republic of China (hereinafter referred to as the "MOFCOM") received the anti-monopoly declaration of the concentration of undertakings on the case of merger between Agrium Inc. (hereinafter referred to as "Agrium") and Potash Corporation of Saskatchewan Inc. (hereinafter referred to as "Potash Corporation") (hereinafter referred to as the "Case"). Upon review, the MOFCOM decided to approve the concentration of undertakings with additional restrictive conditions. In accordance with Article 30 of the Anti-monopoly Law of the People's Republic of China (hereinafter referred to as the "Anti-monopoly Law"), relevant matters are hereby announced as follows:

I. Case-filing and review procedures

On November 8, 2016, the MOFCOM received the anti-monopoly declaration for the concentration of undertakings concerning the Case. Upon review, the MOFCOM considered that the documents for declaration were incomplete, and required the declarer (including Agrium and Potash Corporation, the same below) to supplement. On December 5, after further supplementation, the MOFCOM confirmed that the documents for declaration complied with Article 23 of the Anti-monopoly Law, and therefore the anti-monopoly declaration for the concentration of undertakings was admitted to be filed, and the preliminary investigation was launched. On January 4, 2017, the MOFCOM decided to further review this concentration of undertakings. After further examination, the MOFCOM put forward the competition concerns of the case. On April 1, the MOFCOM decided to further review this concentration of undertakings as agreed by the declarer. At the expiration of the extension, the declarer applies for the withdrawal of the case and receives the approval of the MOFCOM. On June 2, the MOFCOM filed the re-declaration of the declarer for review. The MOFCOM considered that the concentration might have the effects of eliminating and restricting competition in the markets of potassium chloride in the world and China. At present, the case is under further examination and extension, and the deadline is November 25, 2017.

In the course of the review, the MOFCOM solicited opinions from relevant government departments, trade associations, downstream customers and experts in the industry, knew relevant market definition, market participants, market structure, industry characteristics and other aspects, and reviewed the authenticity, completeness and accuracy of the documents and materials submitted by the declarer.

II. General information of the Case

Agrium, a party to the merger, which was incorporated in Canada in 1992 (can be traced back to 1931), is a company listed on Toronto Stock Exchange and New York Stock Exchange. Agrium is a crop nutrient producer and distributor that sells potassium chloride to China through the Canadian Potash Export Corporation (hereinafter referred to as "Canpotex").

Potash Corporation, another party to the merger, which was incorporated in Canada in 1989 (can be traced back to 1975), is a company listed on Toronto Stock Exchange and New York Stock Exchange. Potash Corporation produces and supplies potassium fertilizer, phosphate fertilizer, nitrogen fertilizer, and other agricultural fertilizers and sells potassium chloride to China through Canpotex.

According to the agreement signed by and between Agrium and Potash Corporation on September 11, 2016, the two companies will combine through a new parent company to be established; after the merger, Agrium and Potash Corporation are wholly-owned subsidiaries of the new parent company and the original shareholders will respectively hold 48% and 52% of the shares of the new parent company.

III. Relevant markets

(I) Relevant commodity markets.

Potassic fertilizer includes potassium chloride, potassium sulfate, potassium nitrate, potassium dihydrogen phosphate and others. It can improve crop photosynthesis, promote fruit, enhance drought resistance, cold resistance and disease resistance; therefore, it is an important fertilizer for plant growth. Agrium and Potash Corporation only produce and sell potassium chloride and do not involve potassium sulphate and other potash business; therefore, this case focuses on potassium chloride market.

Potassium chloride usually exists in the crust in the form of sylvite deposits, accounting for about 90% of total potassic fertilizer sales in the world. From the analysis of the content of potassium, characteristics, use and other factors, there is no closely substitution relationship between potassium chloride and other fertilizer products. Farmers usually select specific potassic fertilizer products according to the soil characteristics, crop growth cycle, the expected fertilization effect and other factors; therefore potassium chloride constitutes an independent relevant commodity market.

Potassium chloride can be further divided into red potassium and white potassium according to its color, and can be divided into granular potassium (0.8 - 4.7mm) and standard potassium (0.6 - 3.3mm) according to particle size. There are no differences in the main uses and characteristics of the potassium chloride products of different color and size and the price changes are almost synchronous and highly correlated, and the products have strong substitutability. Therefore, it is not necessary to further subdivide potassium chloride according to granule size or color to form an independent commodity market.

(II) Relevant geographic market.

Potassium chloride is a large amount of raw material goods, and is mainly from Canada, Belarus, Russia and others; during deals in the global scope, the global price shows the characteristics of correlation and synchronization, since import tariff and transportation cost do not constitute a real obstacle in import and export. China highly depends on import. Therefore, the regional market of potassium chloride is the global market and focus will be laid on the impact on the Chinese market.

IV. Competitive analysis

The MOFCOM reviewed the concentration of undertakings in terms of the market concentration, market share and market control force of the undertakings participating in concentration on the relevant market, the impact on consumers and other operators and other factors as required in Article 27 of the Anti-monopoly Law, deeply analyzed the impacts of the concentration of undertakings on market competition and thereby came to believe that the concentration of undertakings might have effects of eliminating and restricting competition in the global and Chinese markets of potassium chloride.

(I) Concentration will further enhance the control of both parties on the global potassium chloride market.

before the concentration, global potassium chloride market is highly concentrated and the production of top four market participants Potash Corporation, Russia Ural Potash Corp (hereinafter referred to as "Ural Potash"), Belarus Potash Corp (hereinafter referred to as "Belarus Potash") and the United States Potash Corp (hereinafter referred to as "the US Potash") accounted for about 63% of the total production capacity of potassium chloride in the world. Potash Corporation ranked first in the market, having stronger market strength. In addition, in view of the fact that Potash Corporation holds shares in competitors such as Arabia Potash Corp, Israel Chemical Industry, Chile Chemical Industry and other peer competitors, appoints directors, participates in business management decisions and other factors, it may exert a decisive influence on more than 30% of the global potassium chloride production capacity. After the completion of the transaction, the surviving entity will integrate resources, and therefore, control over the global potassium chloride production will be further increased by dint of more powerful production, supply and export capabilities, and further widen the gap with major competitors such as Ural Potash and Belarus Potash.

At present, Potash Corporation, Agrium and US Potash sell potassic fertilizer to markets outside North America by Canpotex. Before the transaction, Canpotex has three shareholders, Potash Corporation, Agrium and US Potash, all of which are balanced, and restrict each other. After the completion of the transaction, Canpotex shareholders change to two from three, which changes the balance status. The relative strength of US Potash weakens and the surviving entity enhances the right to speak due to the expanded proportion of supply power. The motivation and ability to coordinate production and sales will be further improved; therefore, in considering the factors of Canpotex, after the completion of the transaction, the surviving entity actually controls capacity of potassium chloride around 50% of the world, which furthers enhance the control force in the global potassium chloride market and may have effect of eliminating or restricting competition on the relevant market.

(II) Concentration will further weaken the bargaining control of the buyer on the Chinese potassium chloride market.

After investigation, Potash Corporation holds part of the shares of China's A company. After the completion of the transaction, the control force of the surviving entity in the global potassium chloride market is further enhanced, which may seek to obtain sensitive information related to China's potash import through the shareholding, further weakening the bargaining power of the buyer.

(III) In the short term, it is difficult to have new market players to the relevant market due to higher barrier of the potassium chloride market.

Potassium chloride is a non-renewable resource, and its production and marketing are subject to the particularity of resources. According to the investigation, it is necessary to have rich potassium mineral resources in the potassium chloride market, while the exploration and construction of potash deposits require a lot of capital during long term and it shall be equipped with infrastructure such as land, wharf and railway, so it is difficult for new market entrants to form effective competitive constraints in the short term.

V. Discussion with additional restrictive conditions

In the course of review, the MOFCOM notified the declarer in good time of the review opinion that the Case might eliminate and restrict competition, and held several rounds of negotiations with the declarer with respect to matters concerning how additional restrictive conditions may reduce the detrimental effects of this concentration of undertakings on market competition. With respect to the proposal on restrictive conditions submitted by the declarer, the MOFCOM mainly made evaluations in terms of the effectiveness, feasibility and timeliness in accordance with the Provisions on Additional Restrictive Conditions for the Concentration of Undertakings (Trial for Implementation).

Upon evaluation, the MOFCOM believes that the final proposal on additional restrictive conditions submitted by the declarer to the MOFCOM on October 27, 2017 can reduce the adverse effects of the concentration of undertakings on market competition.

VI. Decisions

Given that the concentration of undertakings may have the effects of eliminating and restricting competition in global and Chinese markets of potassium chloride, according to the final proposal on additional restrictive conditions submitted by the declarer to the MOFCOM, the MOFCOM has decided to approve the concentration with the additional restrictive conditions, and requires Agrium and Potash Corporation to perform the following obligations:

(I) The surviving entity will transfer the shares of Israel Chemical Industry, Arabia Potash and Chile Chemical Industry held by Potash Corporation transferring the agreement to one or more buyers, underwriting through the two tier securities market, or through a combination thereof via the following schedules:

1. With respect to Israel Chemical Industry's shares held by Potash Corporation, in the case of agreement transfer, the surviving entity will determine one or more buyers within six months after the delivery of the proposed agreement, and shall submit the buyer candidate to the MOFCOM and approved thereby. The final agreement was reached within three months after one or more buyers were identified to strip off Potash Corporation's stake in Israel Chemical Industry. The surviving entity shall submit the sales agreement signed with the buyer to the MOFCOM and be approved thereby. The time taken by the MOFCOM during the examination and approval process is not included in the above-mentioned time limit. In the case of underwriting through the two tier securities market, the surviving entity will complete the two level market sales within nine months after the delivery of the proposed transaction. If necessary, the parties may extend the above time limit by three months.

2. With respect to the shares of Arabia Potash and Chile Chemical Industry held by Potash Corporation, in the case of agreement transfer, the surviving entity will determine one or more buyers within 15 months after the delivery of the proposed agreement, and shall submit the buyer candidate to the MOFCOM and approved thereby. The final agreement was reached within three months after one or more buyers were identified to strip off the stake of Arabia Potash and Chile Chemical Industry held by Potash Corporation. The surviving entity shall submit the sales agreement signed with the buyer to the MOFCOM and be approved thereby. The time taken by the MOFCOM during the examination and approval process is not included in the above-mentioned time limit. In the case of underwriting through the two tier securities market, the surviving entity will complete the two tier market sales within 18 months after the delivery of the proposed transaction.

3. The surviving entity and its affiliates may not repurchase the above-mentioned shares in any form, and shall report the divestiture progress to the MOFCOM in a timely manner.

(II) Within five years from the date of promulgation of the MOFCOM's additional approval, the surviving entity and its affiliates may not acquire any equity of the competitors in potassic fertilizer industry in any form after the transaction has been completed without the prior approval of the MOFCOM. The surviving entity will declare the relevant transaction to the MOFCOM in accordance with the relevant provisions of the Anti-monopoly Law applicable to the MOFCOM. After the expiration of the five-year period, the surviving entity may submit an application to the MOFCOM and cancel or alter the obligation after the assessment by the MOFCOM.

(III) The surviving entity will change the equity interest of Potash Corporation in China's A company into a restricted investment interest. Specifically, the surviving entity will:

1. after the approval of the MOFCOM and before the delivery of the proposed transaction, to remove all Potash Corporation employees who have been assigned to or served as senior management of A company in China;

2. fail to exercise the right to delegate or appoint employees of the surviving entity as senior management of A company in China;

3. do not nominate or appoint any director of the board of directors of A company in China and do not interfere with the nomination or appointment of any director by other shareholders of A company in China;

4. do not seek the way of obtaining competition sensitive information about Chinese potassic fertilizer imports, and will not exercise its right as a shareholder of Chinese A company to obtain competition sensitive information about Chinese potassic fertilizer imports, which includes price of potassic fertilizer, price negotiations, competition situation or others.

(IV) The surviving entity will:

1. ensure that Canpotex will continue to serve as a stable and reliable supplier of potash fertilizer to China on a competitive basis.

2. prompt Canpotex to supply potash fertilizer to China with an average or higher export volume in the past five years subject to satisfactory terms and conditions reached upon negotiations.

3. continue to maintain its current sales practices and procedures.

Besides the supervision and execution of such restrictive conditions subject to the Announcement, the final proposal on additional restrictive conditions submitted by Agrium and Potash Corporation to the MOFCOM on October 27, 2017 shall be legally binding upon Agrium, Potash Corporation and the entity to be established after the combination.

The MOFCOM has the power to supervise the declarer on its own or through a supervision trustee concerning the fulfillment of the above obligations. Where the declarer fails to fulfill the above obligations, the MOFCOM will handle the matter according to the Anti-monopoly Law.

The Decisions shall come into force as of the date of announcement.

Ministry of Commerce of the People’s Republic of China
November 6, 2017