Orica settles CF Industries litigation for $243m, confirms US explosives buyout
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The news: Explosives company Orica has paid USD169.5 million ($242.5 million) to settle litigation with ammonium nitrate supplier CF Industries in the US.
The context: Orica said it will make the payment in the second half of FY26, funded from existing cash and undrawn bank debt facilities.
The litigation commenced in October 2023, with the two companies filing opposing lawsuits within one day of each other regarding the pair’s long-term ammonium nitrate supply contract.
Orica said the settlement, which includes no admission of liability by either party, removes litigation uncertainty and allows the company to establish a new supply base into the US business.
It has also reached an agreement with its joint venture partner Nelson Brothers to acquire its explosives business for USD25 million, plus retirement of USD48 million in debt.
The combination of the acquisition and settlement is expected to be earnings-per-share accretive in the first full financial year of ownership.
The acquisition is expected to boost EBIT in the range of $35 million per year once fully integrated, with further opportunities to grow revenue and realise additional business cost synergies.
The source: ASX
