Agrium Goes European
Agrium Inc.’s latest deal gives the fertilizer company a strong European presence.
Agrium has entered into an exclusive agreement to acquire a 70 percent equity position in Common Market Fertilizers S.A., one of Western Europe’s largest fertilizer distribution companies. CMF has annual sales revenues of $500 million to $600 million and crop nutrient sales volumes of 2 million to 2.5 million tonnes.
The purchase price for 70 percent of the business is $16 million plus working capital of approximately $50 million. The transaction is expected to close in the second quarter of 2008, subject to concluding a definitive purchase and sale agreement, due diligence, and regulatory approval. Oscar Geyer will remain as CEO of CMF, which is headquartered in Brussels, Belgium.
"This acquisition is a key step in our global wholesale distribution strategy," says Mike Wilson, Agrium’s president and CEO. "Europe will be a key end-market for product from our Egyptian nitrogen facility, which is currently under construction. CMF provides us with important access to major distribution assets across Europe and expansion of our sourcing footprint into Eastern Europe, as well as one of Europe’s most experienced teams in fertilizer logistics, distribution, purchasing, and sales. Agrium will become one of the largest global distributors by combining volumes from our Egyptian production, our North American purchase for resale business, and volumes from CMF."
CMF has developed a large base of 1,500 customers, including retailers and cooperatives, across Europe over the past 24 years. It operates through subsidiaries in France, Germany, Belgium, the UK, Italy, and Bulgaria, and it also markets product in Spain, the Netherlands, Ireland, Greece, Denmark, and South America. CMF owns and leases over 300,000 tonnes of dry and liquid storage at both port and inland sites across much of Europe. The privately-owned company currently has about 60 employees located across Europe.