Agrium Sees AWB As A Platform For Retail Growth – for Sep. 9, 2010

Fertilizer maker and farm products retailer Agr ium Inc. sees Australia’s AWB as the perfect platform to continue expanding its global retail network, said a top company executive Aug. 16.

Agrium has launched an unsolicited $1.1 billion bid to acquire AWB, Australia’s largest wheat exporter, trumping a rival offer from Australia’s GrainCorp.

“The key is the right company, one where the culture and base business fits; one in which we can lever our strengths in retail, wholesale and advanced technologies; and one that provides us a platform for growth – AWB is that company,” Agrium chief executive Mike Wilson said in an interview.

Agrium’s primary interest in AWB lies in its extensive retail operations that are spread across Australia.

“We have been looking in Australia for the past five years,” said Wilson. “But we have been patient and have been looking for the right opportunity.”

A consummate deal-maker, Wilson has grown Agrium over the last six years from being primarily a fertilizer maker to also becoming North America’s largest agricultural products retailer.

Wilson, who formerly headed Dow Chemical’s Japanese division, has presided over numerous deals and is no stranger to hostile takeover bids, winning out in a $600-million-plus unfriendly offer for Royster- Clark in 2005-06.

However, Wilson has also proven to be cautious and patient, sensibly backing away from a year-long hostile battle to acquire U. S. rival CF Industries, earlier this year.

Calgary-based Agrium abandoned the $5.4-billion bid, after CF clinched a deal to acquire its U. S. rival Terra Industries.

At the time, Wilson said Agrium would turn its attention back to expanding its global retail operations, while also increasing its output of potash – one of three main crop nutrients, along with nitrogen and phosphate.

Agrium’s retail network in North America is roughly three times larger than the second-place player and its retail unit alone boasted sales of more than $6 billion in 2009. It also owns retail outlets in Argentina and has been expanding its retail presence in Uruguay and Chile.

While Agrium covets AWB’s retail division Landmark Rural Services, it may consider divesting certain parts of the company that are not a part of its core plans – if its bid eventually succeeds.

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