CF Industries is in preliminary talks with Norway's Yara International about a possible merger that would create a mammoth player in the fertilizer industry.
The combined company would have a market capitalization of more than $26 billion, second only to Potash Corp. of Canada.
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Yara International ASA confirmed the talks Tuesday, but both companies say there is no guarantee that a deal will be completed.
A tie-up with CF Industries Holdings Inc., based in Deerfield, Illinois, could give Yara easier access to cheap natural gas supplies, which is a major feedstock in the industry.
Shares of CF Industries are up 6 percent before the opening bell.