Agrium selling most of AWB grain handling and trading business to CargillCALGARY — Agrium Inc. said Wednesday it has reached a deal to sell most of the grain business it only just acquired in its purchase of Australian company AWB Ltd. to U.S. agriculture giant Cargill Inc. for about $870 million.
By: Lauren Krugel, Canadian Press
CALGARY — Agrium Inc. said Wednesday it has reached a deal to sell most of the grain business it only just acquired in its purchase of Australian company AWB Ltd. to U.S. agriculture giant Cargill Inc. for about $870 million.
"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," Agrium chief executive officer Mike Wilson said in a statement.
Calgary-based Agrium (TSX:AGU) was mainly attracted to AWB's retail business, which company spokesman Richard Downey said represents just under half of AWB's earnings, with the rest coming from the grain handling and trading side.
Agrium, a dominant agricultural retailer in North America with a growing presence in South America, has been looking to further expand that part of its business.
The company closed its deal for AWB earlier this month. On top of the $1.23-billion purchase price, Agrium also took on $540 million in AWB debt.
Agrium is still looking to sell another $55-million in AWB assets, bringing the total proceeds it expects to reap to $925 million.
In addition to its retail business, Agrium also produces and markets the three main types of fertilizer: potash, phosphates and nitrogen.
Minneapolis-based Cargill is a privately held producer and seller of food, agricultural, financial and industrial products and services. It employs 131,000 people in 66 countries.