Agrium Inc., the third-largest fertilizer producer in Canada and the U.S., agreed to buy UAP Holding Corp. for about $2.16 billion to boost sales of crop products as demand rises.
UAP investors will receive $39 in cash for each share, a 30 percent premium to the Nov. 30 closing price, Calgary-based Agrium said today in a statement. Agrium said it also will take on $487 million of Greeley, Colorado-based UAP's debt.
Combining the two businesses will allow Agrium to generate annual savings of $115 million by 2010 and will add to earnings from the first year, the companies said. Agrium is buying UAP to boost sales of fertilizer in the U.S. as demand rises and to add to the number of products it sells. Agrium said it expects to raise $1.25 billion in equity to help finance the purchase.
``The transaction will enable Agrium to capitalize on the strong outlook for agriculture markets and will allow us to deliver value to both our shareholders and our customers,'' Agrium Chief Executive Officer Mike Wilson said in the statement. ``It increases the scale and size of our business.''...MOREFrom The Wall Street Journal Online:
The agreement values each share of UAP -- North America's largest independent distributor of agricultural and non-crop products -- at $39 a share, a 30% premium over Friday's closing price of $29.91. The deal also includes the assumption of $487 million in debt....MOREFrom the Financial Post:
Agrium currently has a positive technical profile. Intermediate trend is up. The stock recently bounced from just below its 50 day moving average and is testing its all time high at $64.75 U.S.. Short term momentum data (MACD, RSI) are trying to recover from oversold levels. On balance volume data shows that the stock is being accumulated. Strength relative to the TSX Composite Index and S&P 500 Index has been positive during the past year.