) wholly owned subsidiary - Crop Production Services (Canada)
Inc. - has agreed to divest its selected Canadian retail
assets to the U.S. farmer-owned cooperative and a global energy,
grains and foods company
) for an undisclosed price.
Per the agreement, Agrium's 16 retail agronomy locations in the
provinces of Alberta and Saskatchewan will become part of CHS's
Country Operations division following the divestment. The
transaction is expected to close on or about Apr 1, 2014.
According to CHS, the acquisition will expand its ability to
serve farmers and ranchers in Canada, and return value to
customers through local experts with global connections. The new
42,000-ton fertilizer plant outside Shelby, MT, which is in its
final stages of construction, will benefit the newly acquired
business. The new fertilizer plant is expected to start its
operations from spring 2014 season.
The 16 retail agronomy assets are part of Agrium's acquisition of
Viterra Inc.'s 210 retail stores across Western Canada in Oct
2013, in addition to the 13 previously acquired Viterra retail
locations in Australia for a total consideration of roughly CAD
300 million ($270.8 million).
Agrium had entered into a consent agreement with the Canadian
Competition Bureau before receiving green signal to acquire
Viterra's Canadian retail assets.
Per the terms of the consent agreement, Agrium had to divest 7
retail stores and 9 anhydrous ammonia businesses. Agrium also
agreed to supply anhydrous ammonia to any buyer of the divested
assets for up to four years at prices not to exceed those charged
to its retail outlets in Alberta and Saskatchewan.
According to Agrium, the acquisition of Viterra's assets was an
excellent fit to its portfolio as it enabled the company to
provide highly competitive products, services and technologies by
combining its experience with Viterra's profound knowledge of
western Canadian agriculture.
Agrium, a prominent Canadian fertilizer company along with
), released its fourth-quarter 2013 results last month. The
company's earnings from continuing operations in the reported
quarter dropped 69.3% year over year to $110 million or 74 cents
per share from earnings from continuing operations of $358
million or $2.37 per share a year ago.
Excluding one-time items other than stock-based payment costs,
adjusted earnings of 72 cents per share missed the Zacks
Consensus Estimate of 88 cents.
Agrium logged revenues of $2,867 million in the reported quarter,
down roughly 7% year over year. Sales declined due to a 24% drop
in Wholesale sales as a result of lower realized prices across
all product lines and lower nitrogen volumes, partly offset by
increased retail sales due to the Viterra acquisition. Sales
missed the Zacks Consensus Estimate of $3,037 million.
Agrium currently carries a Zacks Rank #3 (Hold). Another
company in the fertilizer industry worth considering is
); carrying a Zacks Rank #2 (Buy).
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