Viterra Acquisition
Release Date: 5/9/2013
Learn more about Agrium’s agreement with Glencore to acquire Viterra’s Agri-Products business.
On March 20, 2012, Agrium announced that it had entered into a definitive agreement with Glencore to acquire the majority of Viterra’s Agri-products business upon completion of Glencore’s recently announced supported acquisition of Viterra. Under the original agreement, Agrium would acquire approximately 90 percent of Viterra’s Canadian retail facilities, all of its Australian retail facilities, as well as their minority position (34%) in a nitrogen facility located in Medicine Hat, Alberta.
As of August 2, 2012, Agrium announced the sale of the minority position in the nitrogen facility to CF Industries at the close of the transaction. The CF transaction has since been approved by the Canadian Competition Bureau and CF Industries now owns the Medicine Hat facility. Agrium has received $939 million to date from this transaction, with other agreed upon adjustments to come later.
Agrium believes that the Viterra acquisition is an excellent fit with our stated strategy of growing across the value chain, and that our Crop Production Services Retail business can provide significant value for Canadian farmers in a market where we currently have a limited retail presence. Agrium is committed to maintaining strong communication with our stakeholders and will provide updated details regarding this transaction as it progresses.
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FAQ
- Why did Agrium choose to acquire Viterra’s Agri-Products business?
- How many retail facilities does Agrium currently operate in Canada and how many will be acquired?
- How will Agrium manage facilities where retail crop input sales and grain handling occur at the same location?
Why did Agrium choose to acquire Viterra’s Agri-Products business?
Western Canada is an important agricultural region and Agrium has tremendous respect for Viterra’s Agri-Products business, employees and customers. Agrium sought to ensure that we were a part of this transaction, given how well the Agri-Products business complements our current business and growth strategy, as well as the benefits associated with the knowledge and talent that Viterra offers. Additionally, the sophistication of Western Canadian farmers represents a strong match with the high-value service model offered through Agrium’s Retail business, Crop Production Services.
How many retail facilities does Agrium currently operate in Canada and how many will be acquired?
Although Agrium’s Retail business, Crop Production Services, has had a longstanding presence in the United States, our Canadian retail operations were only established in 2009. Through Crop Production Services, Agrium currently operates 65 retail facilities in Canada. Agrium is expected to acquire 232 of Viterra’s 258 retail facilities in Western Canada, as well as 17 located in Australia. The majority of the remaining 26 Canadian retail facilities are expected to be acquired by Richardson International Limited.
The combination of Agrium’s existing Canadian retail facilities with the acquired Western Canadian retail facilities of Viterra is expected to add approximately 3 to 4% to Viterra’s existing Western Canadian market presence by retail locations.
How will Agrium manage facilities where retail crop input sales and grain handling occur at the same location?
The majority of the 26 Viterra retail facilities that are not included in Agrium’s purchase agreement are locations with both retail crop input sales and grain handling operations. For the few remaining facilities where retail crop input sales and grain handling occur at the same location, Agrium has reached a shared use agreement with Glencore specifying that operations will be separated to the extent possible.
