SIOUX CITY, Iowa -- Terra Industries Inc. today announced that its Board of Directors has unanimously concluded that the Jan. 15, 2009, unsolicited proposal from CF Industries Holdings, Inc. is not in the best interests of Terra and Terra's shareholders.

Following is the text of the letter that Terra sent today to Stephen R. Wilson, Chairman, President and Chief Executive Officer of CF Industries:

Mr. Stephen R. Wilson
Chairman, President and Chief Executive Officer
CF Industries Holdings, Inc.
4 Parkway North, Suite 400
Deerfield, IL 60015

Dear Mr. Wilson:
The Board of Directors of Terra Industries Inc., with the
assistance of its financial and legal advisors, has carefully considered your unsolicited proposal to combine our companies.

Although we are perplexed by your decision to make a public
approach that is conditioned on and subject to due diligence, we have nonetheless examined thoroughly the full range of strategic, industrial, financial and legal aspects of the combination you propose.

We concluded that your proposal does not present a compelling case to create additional value for the shareholders of either company, and that it substantially undervalues Terra on an absolute basis and relative to your company. Accordingly, our Board has unanimously concluded that your proposal is not in the best interests of Terra and our shareholders, and we decline to accept it.

Michael L. Bennett
President and CEO
Henry R. Slack
Chairman of the Board

cc: Board of Directors of CF Industries Holdings, Inc., c/o
Corporate Secretary, CF Industries Holdings, Inc.

Credit Suisse Securities (USA) LLC is serving as Terra's financial advisor, and Cravath, Swaine & Moore LLP and Wachtell, Lipton Rosen & Katz are serving as legal counsel to Terra.

Terra Industries Inc., with 2007 revenues of $2.4 billion, is a leading international producer of nitrogen products.

SOURCE: Terra Industries Inc. via Business Wire.