Cargill recently announced that it entered into a binding purchase agreement with Agrium to sell its U.S. ag retail business. The 18 ag-retail locations would technically be acquired by Agrium’s subsidiary, Crop Production Services, Inc. These locations have annual revenues of over $150 million, adding to Crop Production Services’ large footprint in the ag retail market. This acquisition merges the 19th ranked ag retailer into the largest ag retailer, CPS, according to CropLife’s list of the 100 largest U.S. ag retailers.
As noted in Cargill’s press release, Agrium’s President and CEO, Chuck Magro said, “This acquisition demonstrates our continued focus on growing our North American ag-retail business, particularly in the highly desirable U.S. Corn Belt. The locations are in regions where we currently have a limited presence. This acquisition will allow us to capitalize on synergies related to the introduction of our proprietary products and services, and leveraging our extensive distribution network.” He continued, “We welcome the Cargill ag-retail employees to the Agrium family and are excited to bring our agronomic expertise and quality products and services to growers in this important agricultural region.”
The move by Cargill to sell the ag-retail locations is to concentrate on the sale of grain and oilseeds due to slumping prices of commodities. Decreasing some of its operations comes during a time of slumping commodity prices.
As stated by Cargill’s lead for the North American agricultural supply chain, Roger Watchorn, “Cargill will focus on being the world’s leading merchant of grain and oilseeds. We remain steadfast in our commitment to help farmers succeed by ensuring they remain competitive in the global market and being as efficient as possible in getting products from origins to destinations.”
The 18 Cargill locations are in the northern U.S. corn-belt region, including the states of Nebraska, South Dakota, Minnesota, Wisconsin, Michigan, and Indiana. These outlets include above ground storage tanks for liquid fertilizer.
This purchase by Agrium continues the company’s acquisition trend this year. Agrium bought 27 U.S. retail locations in the first quarter of 2016, continuing the effort to control a quarter of the market in the U.S.