Canadian fertilizer and ag retail giant Agrium has confirmed it’s in talks with potential buyers for the former Australian Wheat Board’s grain handling and grain merchandising businesses.
Agrium acquired the business as part of its C$1.24 billion takeover of AWB Ltd., which it formally completed Dec. 3.
In its recent releases on the subject, Agrium has emphasized its main interest in Melbourne-based AWB is Landmark Rural Services, Australia’s biggest distributor of ag inputs, with over 400 locations in Australia and New Zealand.
Landmark’s retail offerings apart from crop chemicals and fertilizer include assorted rural merchandise, agronomy services and real estate agency services as well as AWB’s wool marketing operations.
AWB’s Commodity Management wing, meanwhile, includes its grain merchandising, pool management, storage and handling and trade finance operations.
Grain marketing, pool management and logistics in Australia are part of AWB’s Australian Commodity Management business, while its international activities, run through AWB’s offices in Switzerland and India, fall under International Commodity Management.
AWB for over 60 years was Australia’s statutory grain marketing agency, but its grain market muscle there has weakened since 2008, when it lost its wheat export monopoly powers in the wake of a scandal over kickbacks to secure sales to Iraq during the late Saddam Hussein’s regime.
Agrium said in a release Tuesday it would confirm talks with “a number of interested parties” for the Commodity Management operations, if only to quell “speculative articles in the Australian press with respect to (a) possible sale.”
Some of those “speculative articles” followed Agrium’s own statements earlier this month, as it sealed the AWB takeover.
“Agrium has not had direct participation in the grain handling and trading business to date,” the company said Dec. 3. “We continue to evaluate our options with respect to this business and we expect to provide clarity on this in the near future.”
The Calgary company has already previously said its expansion into Australia was part of a broader strategy to build its ag retail business, which became the biggest in North America when it bought U.S. ag retail firm UAP in 2008.
Agrium emphasized Tuesday that “no definitive agreement has been entered into with respect to the sale of the commodity management businesses,” thus it can’t assure that any such agreement or sale will take place.
The company also said Tuesday it “will make no further announcements or communications” on the matter, until either a sale agreement is reached or all related talks end with no deal reached.