Yara International ASA has signed a non-binding Heads of Terms with U.S.-based Praxair, Inc. to sell its European CO2 business for EUR 218 million. The agreement also includes a sale of Yara's remaining 34% stake in the Yara Praxair Holding AS joint venture to Praxair for an estimated EUR 94 million.

"The CO2 business has been an attractive and long-standing part of Yara's portfolio, but remains a relatively small part of the broader industrial gas industry, and where Praxair is well positioned to create additional value. I am confident that this business will be further strengthened under Praxair's ownership, and at the same time this agreement allows Yara to re-deploy management and financial capacity to other value-creating opportunities" said Svein Tore Holsether, president and Chief Executive Officer of Yara International ASA.

The proposed transaction is conditional upon final transaction agreements, obtaining necessary approvals from competition authorities, and other customary closing conditions. The transaction is expected to close in the first quarter of 2016, with a provisionally estimated post-tax gain of EUR 150 million including the Yara Praxair Holding AS sale.

In 2014, Yara's European CO2 business sold more than 850 thousand metric tons of liquid CO2 and 50 thousand metric tons of dry ice, delivering an EBITDA of EUR 21.5 million and revenues of EUR 112 million primarily from the food and beverage industry. The business operates 5 CO2 liquefaction plants, 3 CO2 ships, 7 ship terminals and 6 dry ice production facilities.

The Yara Praxair Holding AS joint venture, operating in Scandinavia and formed in 2007, had a 2014 EBITDA of EUR 35 million and revenues of EUR 145 million (100% basis). Yara's exit from the joint venture is regulated through a put/call option in the joint venture agreement.

The Heads of Terms also includes an agreement for Yara to supply Praxair with raw CO2, gas and continue to operate three of the CO2 liquefaction units which are integrated within Yara's fertilizer plants.