Canada's federal antitrust watchdog has given its blessing to fertilizer and ag retail giant Agrium to buy most of Viterra's Prairie ag retail holdings -- but with the buying must come some selling.
Almost 18 months after Agrium announced its deal with grain handler Viterra's new owner, Swiss commodity firm Glencore Xstrata, Canada's Competition Bureau on Thursday approved Agrium's purchase of about 210 Viterra retail stores across the West.
The bureau, however, now requires Calgary-based Agrium to find new owners for eight retail stores, and for the anhydrous ammonia businesses connected to nine other retail stores, in Alberta and Saskatchewan.
During its review of Agrium's planned purchase, the bureau found the acquisition "would likely lead to a substantial lessening or prevention of competition in the retail supply of anhydrous ammonia and urea to farmers in certain areas of Alberta and Saskatchewan."
Agrium, as per its consent agreement with the bureau, now must also supply anhydrous ammonia to whoever buys the divested outlets, for up to four years.
The prices Agrium charges for that supply must not exceed those charged to Agrium's own retail outlets in Alberta and Saskatchewan, the bureau ruled.
The retail stores to be sold include the CPS stores Agrium already owns at Bow Island, Eaglesham and Lacombe, Alta., along with the Viterra stores at Vauxhall, Alliance and Alix, Alta. and Edenwold, Sask.
The anhydrous businesses to be sold include five CPS anhydrous sites, at Canora, Kinistino, North Battleford, Prince Albert and Yorkton, Sask., and four Viterra sites, at Medicine Hat, Camrose and Craddock, Alta. and Cudworth, Sask.
"I commend the merging parties for their co-operation throughout the merger review and for reaching this agreement that will preserve competition in the retail supply of anhydrous ammonia and urea in Alberta and Saskatchewan," John Pecman, federal commissioner of competition, said in the bureau's release.
The bureau said it reviewed 40 local-level markets where Agrium and Viterra overlapped in retail sales of urea and anhydrous. The review focused on each area's retail supply in terms of "the few remaining competitors, the barriers to entry and the significant concern expressed by market participants regarding the retail supply of these products."
Agrium CEO Mike Wilson, in that company's separate release Thursday, said it's "very pleased to have completed this important step in this highly attractive acquisition" and expects to complete the deal with Glencore "over the coming weeks."
Financial details, such as the exact final price Agrium will pay for the Viterra outlets, are to be released when the deal formally closes, Agrium said.
Agrium, Wilson said, expects that "by combining Viterra's deep knowledge of western Canadian agriculture with Agrium's experience as the largest agricultural input retailer in the world, we will be able to provide an expanded and highly competitive offering of products, services and technologies, while maintaining strong local relationships."
Agrium's agreed-upon purchase also included 13 Viterra retail locations in Australia, which were acquired back in June.
The remainder of Regina-based Viterra's chain of 253 retail stores have already been spoken for, in separate deals with Winnipeg agribusiness Richardson International and Saskatoon-based Federated Co-operatives Ltd. (FCL).
Glencore's deal with Richardson -- announced in March 2012 along with the Agrium deal -- formally closed in May this year. Glencore's deal with FCL, which involves 17 Viterra stores and was announced late last month, still requires Competition Bureau approval. -- AGCanada.com Network
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