The world’s largest producer of finished phosphate products reported a bigger-than-expected quarterly profit, helped by cost-cutting.

Fertilizer prices have fallen as the strong U.S. dollar makes phosphate and potash more expensive in export markets such as Brazil and India.

At the same time, Chinese companies have boosted phosphate exports to India while state-owned fertilizer company Belaruskali earlier this year shipped a “disrupting” amount of potash into Mosaic’s U.S. backyard, Chief Executive Joc O’Rourke said in an interview.

Mosaic said its sales of phosphate and potash dipped in the third quarter and look lower for the current fourth quarter. But globally, Mosaic predicts record-high phosphate shipments this year and next, and potash sales by all sellers combined to finish 2015 with the second-highest total ever.

O’Rourke, who took the top job in August, said he is “not particularly concerned” about losing market share.

“When you maximize value, there’s certain business you walk away from because it’s not giving you the return you want.”

Mosaic, North America’s second-biggest potash producer, has curbed its Canadian potash production twice in the past two months.

Excluding one-time items, Mosaic earned 62 cents per share in the third quarter, above the average analyst estimate of 53 cents, according to Thomson Reuters I/B/E/S.

Cost-cutting, share buybacks and a lower effective tax rate lifted Mosaic’s adjusted earnings per share, Chief Financial Officer Rich Mack said.

The company is carrying out a five-year plan, announced in 2013, to cut $500 million in operating costs, including about 550 jobs. (Related: Mosaic lays off staff at Sask. potash mine)

Net earnings dropped nearly 21 per cent to $160 million, or 45 cents per share, hurt by lower sales of phosphates and potash and a strong dollar.

Mosaic’s net phosphates sales fell to $1 billion in the quarter from $1.1 billion a year earlier, while potash net sales dropped to $492 million from $593 million.

The Plymouth, Minnesota-based company’s net sales fell 6.5 per cent to $2.11 billion in the third quarter, below analysts’ estimate of $2.33 billion.

Mosaic stock rose 3.6 per cent in New York to $35.73. Up to Monday’s close, Mosaic’s shares had lost more than 21 per cent in the past 12 months.

Reporting by Rod Nickel and Shubhankar Chakravorty

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The stock and cash deal comes 10 months after CF’s merger talks with Yara International collapsed. It marks the largest fertilizer M+A deal since 2011 and comes as big global supplies weigh on nitrogen prices.

CF, which is assuming $2 billion of OCI’s debt, will become a subsidiary of a new holding company based in the United Kingdom (all figures US$). By moving headquarters, CF will pay a lower tax rate, which CEO Tony Will told analysts would be part of $500 million in total synergies, along with savings on operations.

CF shares in New York jumped 7.2 per cent to $66.04 and OCI’s Amsterdam-listed shares climbed six per cent to 32.13 euros.

Including CF’s U.S. expansions and OCI’s plants in the Netherlands and Iowa, CF will increase nitrogen capacity by 65 per cent over two years.

Others, however, such as Koch Industries and Agrium are also expanding capacity.

“Even after all the capacity being contemplated in North America comes online, the U.S. is still going to be importing about 25 per cent of our total nitrogen requirements,” Will said.

“The market needs all of the product.”

Asked about possible U.S. tax concerns, Will said OCI insisted the deal include a European headquarters.

Buying OCI’s Iowa plant, which is under construction, will eliminate a rival supplier to U.S. farmers, but Will said he didn’t expect significant antitrust concerns from regulators.

CF shareholders will own 72.3 per cent of the new company, which will be led by CF management. OCI will own the rest.

CF, a co-operative until going public in 2005, is also buying OCI’s global distribution business based in Dubai and its interest in an ammonia and methanol complex in Beaumont, Texas. The deal excludes OCI’s production plants in Egypt and Algeria.

OCI said last November it planned to spin off its construction and engineering business and list it in Egypt and the United Arab Emirates.

— Shubhankar Chakravorty and Rod Nickel are Reuters correspondents in Bangalore and Winnipeg respectively.

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