AgroPages-Agrium to acquire UAP-Agricultural news

The Canadian agricultural products company, Agrium (Calgary, Alberta), has agreed to acquire the major US agrochemical distributor, United Agri Products (UAP - Greeley, Colorado). The deal should create the largest North American retailer of crop inputs and services, the companies say. The transaction is expected to be completed in early 2008.

Agrium will make a cash offer for all of UAP's common stock at $39/share, which values the deal at some $2,650 million. The deal is expected to generate annual synergies of some $115 million by 2010 through improved profit margins from crop protection products, seed and fertilisers.

Agrium has significantly expanded its presence in the US retail sector over the past two years with the acquisition of 32 outlets from Archer Daniels Midland this year and the purchase of Royster-Clark in 2006. The combination of Agrium's and UAP's retail operations would result in pro forma crop protection sales of some $2,000 million out of total retail sales of some $5,200 million. The addition of 370 retail outlets from UAP would nearly double the size of Agrium's retail business.