The proposed US$36-billion merger of agricultural giants Potash Corporation of Saskatchewan and Agrium Inc. has been in the works for nearly a year, a source familiar with the negotiations told Business News Network.

The two agricultural heavyweights explored various types of combinations – including smaller mergers of limited operations of the companies – before agreeing to a full merger, the source explained in a conversation with Amber Kanwar.

PotashCorp and Agrium announced terms of the deal on Monday, including an estimated US$500 million in estimated synergies and cost savings. And while the merger will result in job cuts, most of those savings are expected to come from combined distribution operations and retail integration, the source said. The combined company will employ about 20,000 workers in 18 countries.

The merger would create one of the world’s largest fertilizer companies, bringing together PotashCorp’s fertilizer mining operations with Agrium's extensive global direct-to-farmer retail network. No asset sales are currently contemplated to make the merger more palatable to regulators, the source said.