Chicago | Reuters –– U.S. grain trader Cargill has agreed to sell its ag retail business in the United States to crop input seller and distributor Agrium, the companies said Wednesday.
Calgary-based Agrium, North America’s largest retail seller of crop inputs such as seed, fertilizer and pesticides, will acquire 18 ag retail locations in Nebraska, South Dakota, Minnesota, Wisconsin, Michigan and Indiana. The businesses have annual revenues exceeding US$150 million.
The transaction is expected to close by the end of the third quarter after a regulatory review, they said.
The deal “does not involve” any of Cargill’s Canadian ag retail sites across the Prairie provinces and southern Ontario, the companies added. Cargill in Canada operates 57 AgHorizons retail sites, of which 34 are attached to Cargill grain elevators.
The deal marks the latest transformative move for privately held Cargill, which has been refocusing its operations by exiting some lower-margin businesses and expanding into higher-margin endeavours such as food ingredients and aquaculture.
The 151-year-old grain trader is also trimming some operations in the face of slumping commodities prices and focusing on its core strengths such as grain trading and processing.
The company also said in February that it would stop selling seeds, fertilizer and crop chemicals in the Black Sea region.
Cargill “will focus on being the world’s leading merchant of grain and oilseeds,” said Roger Watchorn, Cargill’s lead for the North American agricultural supply chain.
Agrium, meanwhile, has been seeking to build or buy more stores in the U.S. to claim a quarter of the market in the country, CEO Chuck Magro told Reuters in May.
“The (Cargill) locations are in regions where we currently have a limited presence,” Magro said in a release on Wednesday.
Agrium bought 27 U.S. retail locations in the first quarter.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Includes files from AGCanada.com Network staff.Tagged ag retail, AgHorizons, Agrium, cargill, crop inputs, crop retail