Canadian combination will create one of the largest crop nutrient companies in the world.

PotashCorp and Agrium have agreed a merger of equals that will create a new company worth $36 billion (£28 billion), producing more than 30 million tonnes of fertiliser per year. The companies expect the union to help reduce costs and boost efficiency to better cope with market fluctuations.

PotashCorp is the largest potash producer in North America but, as a wholesale business, lacks access to local distribution networks. Agrium has over 1400 sites in seven countries, which will allow the new company to reach customers with an expanded portfolio of potassium, nitrogen and phosphorus fertilisers.

The all-shares deal will create a new holding company, owned by existing PotashCorp (52%) and Agrium (48%) shareholders, and the senior management team will be drawn from both firms’ boards. The move is the latest in a series of large mergers in the agrochemicals sector, with pending mergers between Dow and DuPont; ChemChina and Syngenta; and Bayer and Monsanto.