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Shareholders of Russian fertilizer producers OAO Uralkali (URKA.RS) and Silvinit (SILV.RS) have approved the companies' $1.4 billion merger, to create the world's No. 2 potash producer after Potash Corp. of Saskatchewan (POT), Uralkali said Monday.

The deal comes after the Canadian government blocked BHP Billiton Ltd.'s (BHP) $39 billion bid for Potash Corp. in November. Profits at fertilizer producers have been rising at a time of increasing anxiety about global grain inventories and a surge in prices for such crops as wheat, corn and soybeans.

According to the transaction terms, Uralkali will buy about 20% in Silvinit for $1.4 billion and will purchase the rest of the company through an issuance of new shares. The merger is expected to be completed in May, subject to regulatory approvals.

"We are excited about the creation of a leader in the global potash sector and the opportunities that will arise in this highly dynamic industry for the combined group," Uralkali Chief Executive Officer Pavel Grachev said in a statement.

The management of the two companies, which had been one entity prior to privatization in the 1990s, expect to achieve synergies of $100 million a year from the merger by 2013.

-By Nadia Popova, Dow Jones Newswires; +7 495 232-9198; nadia.popova@dowjones.com