WINNIPEG, Manitoba (Reuters) - U.S. farm co-operative CHS Inc (CHSCP.O) said on Monday it has agreed to buy 16 Canadian farm retail outlets from Agrium Inc AGU.TOAGU.N, and plans to further expand its business in Canada.
The deal includes eight stores that sell seed, chemicals and fertilizer to farmers, as well as eight ammonia tank businesses, located in Alberta and Saskatchewan, the two biggest wheat- and canola-growing Canadian provinces.
The purchase bulks up CHS’ modest Canadian holdings, which currently consist of three retail stores and small offices in Winnipeg and Calgary.
The St. Paul, Minnesota-based company is interested in buying or building more farm retail stores, grain-handling sites and fuel sales locations in Canada, said John McEnroe, executive vice-president of CHS country operations.
”Anything that touches the farmer, we would be interested in looking at,“ he said in an interview. ”There’s a good argument that instead of a Canadian market and a U.S. market for agricultural commodities, it could be a North American market.
“As the border blurs, we see the opportunity for Canada to grow for us.”
CHS’ interest in Canada grew with the end of the Canadian Wheat Board’s grain marketing monopoly in 2012 and the once-powerful farmer-owned grain pools over the past decade, McEnroe said.
A fertilizer plant that CHS is building near Shelby, Montana, which is expected to open in spring, will supply some of the Canadian outlets, McEnroe said.
Terms of the deal, which is to close around April 1, were not disclosed.
Agrium acquired some of the assets as part of its 2013 purchase of more than 200 Canadian outlets from Viterra, a unit of Glencore Xstrata PLC (GLEN.L), said Agrium spokesman Richard Downey. To gain approval from Canada’s Competition Bureau, Agrium had to divest certain outlets in sensitive areas.
CHS shares on the NASDAQ exchange eased 0.4 percent in midday trading, while Agrium stock gained about 1 percent in New York and Toronto. Agrium was lifted by Cowen and Company’s rating upgrade for the fertilizer company to “market perform” from “underperform”.
Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe and Stephen Powell