Norwegian fertiliser giant Yara and U.S.-based CF fertilisers have entered into talks on a planned merger.

The proposed merger of equals would create a single fertiliser giant worth an estimated £16.5 billion and enable Yara to expand into the North American market, where it has already made inroads.

A Yara spokesperson told news group Reuters on Monday that talks are still in their early staged, but that the company had been forced to go public with the plans after news of the merger was leaked. Yara said in a statement on Tuesday that, "The discussions are at an early stage, and there can be no assurances that these discussions will result in any transaction."

If it does ahead, a merger of the two nitrogen-based fertiliser firms would create a fertiliser juggernaut that could rival the Saskatchewan Potash company, though the Norwegian government will have to consent to the plans, as it owns over a third of Yara.