At my house, the one undeniable sign that spring has arrived comes not from warming weather or plant buds starting to push up through the ground. It’s ducks.
There’s a small stream that flows through my backyard, and each spring, a dozen or so Mallard ducks make their home along its banks. Mind you – it’s not just that the ducks show up that signals spring’s arrival. It’s their pursuit of a mate. Each year, three or four male Mallards make their pitch to one female to raise a family of chicks. This involves the flapping of wings, lots of quacking, and plenty of chasing off rivals. This all resembles a kind of bizarre “duck dance” to observers. Eventually, the female makes her choice and the left out males fly off in search of another mating opportunity elsewhere.
In our marketplace, I was reminded of this annual spring rite watching events unfold in the fertilizer supplier industry. For more than one year, several crop nutrients producers have pursued mergers with one another like the ducks in my backyard. Agrium chased CF Industries, which rejected each takeover bid. In turn, CF Industries chased Terra, which also kept rejecting offers. At times, the verbal banter going back and forth between these companies seemed as frenzied as the male ducks looking to attract a female.
Then, in early January, it looked like the chase had ended. CF announced it was selling its shares in Terra, opening the door for Agrium to finally win its hand. Terra, meanwhile, struck a deal with Yara International to be acquired.
But the chase had one final twist before ending. With a set price for acquisition provided by Yara, CF made one last bid for Terra, which was higher. In the end, Terra’s shareholders liked CF’s “duck dance” better and voted to become its “mate.” Spurned, Agrium and Yara decided to “fly off.”
In a few months, the ag industry will know what kind of business family CF and Terra will have in place. Most likely, this will encourage the players left out of this particularly merger picture to hunt for new partners.
And the business world’s version of the duck dance will continue . . .
