Agrium Sells Commodity Management Business
December 16, 2010 Cargill, Inc. has agreed to acquire a majority of Agrium Inc.’s commodity management businesses of AWB Ltd. The purchase price to be paid by Cargill will be the net asset value of the acquired businesses as at the completion date of the transaction plus a premium. The purchase price will be payable in cash and by Cargill assuming AWB’s consolidated indebtedness related to the acquired businesses. Agrium anticipates the sale to Cargill will be completed in the first half of 2011.
If the transaction had occurred and the purchase price had been determined on the basis of the net asset value of the acquired businesses as at September 30, 2010, Agrium estimates that the aggregate of the net proceeds from the sale of the acquired businesses to Cargill, together with the release of working capital from AWB Harvest Finance Ltd., a finance company that supports the ACM business, would have been approximately $870 million.
Agrium is continuing to evaluate the disposition of certain other businesses that form part of the commodity management business that is not being acquired by Cargill.
“We are pleased to have reached an agreement for the sale of AWB’s commodity management business to Cargill, one of the world’s leading grain handlers and traders," says Agrium’s president and CEO Mike Wilson. "Agrium indicated from the outset that we would conduct a thorough review of the commodity business with AWB management, and we believe that this is the best course of action for all stakeholders involved. The combination of AWB’s commodity management business with Cargill will be a significant milestone in the evolution of Australia’s grain industry. We believe it will provide dividends for Australian growers through improved market access, knowledge, relationships, and expertise in the world grain trade and as a result will provide a stronger global marketing presence for Australian crops."
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