Yara International (YAR) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of the Gulf Coast Ammonia plant in Texas City for $1.3 billion aligns with the strategy to diversify energy exposure and enhance global ammonia production competitiveness through access to low-cost U.S. gas and economies of scale.

• The plant adds 1.3 million tons of annual capacity, increasing flexibility and strengthening the global ammonia system.

• Strengthens operational resilience, supports long-term earnings expansion, and reinforces presence in the U.S. market.

• Enables flexible, step-wise entry to low-carbon ammonia, subject to regulatory and financial viability.

• No further large-scale ammonia investments are planned at this stage, focusing on integrating this asset.

Financial terms and conditions

• Purchase price is $1.3 billion, payable upon closing, funded through a mix of cash and corporate debt.

• Pro forma Net Debt/EBITDA expected to rise to 1.73, within the capital allocation policy range.

• CapEx for 2026 will be $2.5 billion, front-loading anticipated growth but within the 2030 CapEx framework.

• Capital allocation framework targets average annual capex of $1.2B (2026-2030) and maintains strict discipline.

• Cash cost for production is estimated south of $250/ton at current gas prices.

Synergies and expected cost savings

• Access to low-cost U.S. gas and economies of scale expected to lower fixed costs and capital per ton.

• Enhances ability to serve both external customers and internal sourcing needs, leveraging a robust midstream position.

• The plant is projected to be among the most profitable and efficient in the portfolio, improving the overall cost position.