How do I enter the merger of Agrium Inc and Potash Corp of Saskatchewan Inc to form Nutrien Ltd?

ahartviksen
ahartviksen Member ✭✭
edited June 2018 in Investing (Windows)
All shares in both Agrium and PotashCorp were exchanged for shares in
Nutrien effective January 1, 2018. Agrium shareholders received 2.23
Nutrien shares for each Agrium share. PotashCorp shareholders received
0.40 Nutrien shares for each PotashCorp share. No fractional shares of
Nutrien were issued. Each Agrium shareholder and PotashCorp shareholder
that would otherwise have been entitled to receive a fraction of a
Nutrien share will receive, in lieu thereof, a cash amount, without
interest, determined by reference to the volume weighted average trading
price of Nutrien shares on the Toronto Stock Exchange on the first five
trading days on which such shares trade on such exchange following
January 2, 2018.

In my case I had 51 PotashCorp shares which were tendered for $1,272.43 receiving 20 Nutrien shares and 16 Agrium shares which were tendered for $1,824.39 receiving 35 Nutrien shares, according to my brokerage statement. I do not yet know the cash in lieu of fractional shares amount.

I am using Quicken - Home & Business 2018 R2 for Canada.

Comments

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    a)  I am a US user rather than Canadian, so there could be some differences that apply
    b)  The tax consequences could also apply, be different than I am used to (US), and alter the applicable approach.
    c)  I have not reviewed anything outside of your message and I am not a tax pro, etc. much less a Canadian tax pro.

    I would likely
    1)  Backup my data file to ensure a reliable recovery point
    2)  Create the Nutrien security in Quicken with proper ticker etc.  I prefer to do this independently within Quicken rather than as part of other processes.  
    3a)  Generate a Corporate Acquisition (stock for stock) whereby Nutrien acquires Agrium at the applicable share ratio (2.23).  Supply the closing price of Nutien on the closing date for the acquisition.  This will generate Add (Nutrien) Shares transactions for each lot of Agruim you held.  Fractional shares will be generated.  The acquisition date and basis of your Agruim shares will transfer to the new lot of Nutrien shares. 
    3b)  Repeat for the Potash shares 
    4a and b) When you get the info on the cash-in-lieu amounts (and I am assuming you'll get two), sell the applicable fractional shares of Nutrien for those cash-in-lieu amounts.   

    That describes what the US users would describe as a tax-free acquisition - the original basis is carried over, no capital gains are generated (other than small amounts associated with the cash-in-lieu amount).  For a 'taxable' event, the US user would sell the Agruim and Potash shares and buy the shares of Nutrien.  That would generate capital gains tax liability and create a new basis value for the Nutrien shares.  
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