Agrium’s Crop Production Services (CPS) arm will need to sell four ag retail sites in eastern Alberta to close on its deal to buy an independent western Prairie retail chain.
The federal Competition Bureau on Thursday announced an agreement with CPS dealing with the company’s planned purchase of Andrukow Group Solutions Inc. which operates 18 retail outlets, nearly all in Alberta.
The consent agreement, filed Thursday with the federal Competition Tribunal, calls for CPS to sell its own agri‑product retail locations at Marwayne and St. Paul, Alta., about 40 and 150 km northwest of Lloydminster respectively.
It also calls for CPS to sell the Andrukow outlets at Wainwright and Sedgewick, Alta., about 100 km southwest of Lloydminster and about 170 km southeast of Edmonton respectively.
Andrukow’s operations also include Alberta sites at Amisk, Camrose, Clyde‑Flatlander, Daysland, Dewberry, Fort Saskatchewan, Mundare, Paradise Valley, Provost, Rycroft, Ryley, St. Paul, Strathmore, Viking and Waskatenau, and one at Marsden, Sask., about 110 km west of North Battleford.
The consent agreement calls for CPS to use “commercially reasonable efforts” to close deals for the four sites within an agreed-upon time frame, or a divestiture trustee would then be appointed to do so.
The agreement will also block CPS from acquiring similar types of ag retail and fertilizer assets in the area of the Andrukow properties for three years, and from buying back the divested sites for 10 years, after the divestiture is completed.
Andrukow first announced its planned sale to CPS in late April, saying it would create “added diversity in our portfolio of leading-edge product and technology options” plus “an expanded team of industry experts.”
In a separate release Sept. 6, after the consent agreement was announced, Agrium CEO Chuck Magro said the acquisitions “will increase our retail presence close to our manufacturing facilities in Western Canada, where we can optimize freight and handling.”
The bureau said its review of Calgary-based Agrium’s deal for Andrukow focused on the local retail supply of nitrogen fertilizers to farmers, “as it did in its review of Agrium’s purchase of Viterra’s agri‑product retail facilities in 2013.”
Without the four divestitures, the bureau said, “the proposed transaction would lead to a substantial lessening or prevention of competition in the retail supply of urea, UAN or anhydrous ammonia in a number of local markets in Alberta and Saskatchewan.”
The bureau said its review looked at sales information obtained from both CPS and Andrukow as well as “third party competitors” and identified “a number of markets with high concentration.”
The financial terms of Andrukow’s purchase agreement with CPS haven’t been released. — AGCanada.com NetworkTagged Agrium, Andrukow, Competition Bureau, CPS, Marwayne, Sedgewick, St. Paul, Wainwright