Seventeen Prairie farm retail supply outlets are headed back to the co-operative model from whence their former owner came.
Federated Co-operatives Ltd. (FCL) announced Tuesday it has signed a deal to buy 17 fertilizer, seed and agriculture chemical supply centres from Viterra, the Prairie grain arm of Swiss commodity firm Glencore Xstrata, for an undisclosed sum.
The sale, expected to close by the end of September, includes eight sites in Saskatchewan (Canwood, Cupar, Leoville, Lloydminster, North Battleford, Prince Albert, Strasbourg, White Star), eight in Alberta (Barons, Claresholm, Crossfield, Grimshaw, High River, Manning, Stettler, Viking) and one site at Roblin, Man.
The deal is a “two-step” transaction, in which FCL will buy the 17 sites from Viterra, and will then transfer those sites’ ownership and operations to local retail co-ops that have already agreed to accept the facilities.
FCL, whose 235 retail co-op owners already operate over 140 ag retail centres in the West through the Co-operative Retailing System (CRS), said staff at all 17 Viterra centres will be offered similar terms of employment within the CRS.
Customers “will be contacted about the changes and informed about the benefits of buying their products from Co-op,” FCL said.
Customers who don’t already have Co-op memberships will be “welcomed and encouraged” to do so, which would provide them with equity accounts and the opportunity for cash back on overall purchases, FCL added.
Further details are to be announced once the deal closes next month, Saskatoon-based FCL said.
Viterra was formed as a publicly-traded company through three mergers, between 1998 and 2007, of four former Prairie grain co-operatives: Saskatchewan Wheat Pool, United Grain Growers, Manitoba Pool Elevators and Alberta Pool. Glencore formally took over Viterra in December.
Viterra agreed in a side deal in May last year to sell about 90 per cent of its ag retail network, among other assets, to Calgary-based fertilizer and ag retail giant Agrium. That deal still awaits approval from Canada’s Competition Bureau.
Spokesmen for Viterra and Agrium weren’t immediately available Wednesday to say whether any of the 17 outlets to be sold to FCL were originally destined for Agrium.
FCL spokesman Daryl Oshanek deferred that question to Viterra, but said FCL’s deal with Viterra has been in the works for “a number of months.”
Glencore has also agreed to sell other Viterra assets since last May, including a number of grain elevators, ag retail centres and other assets to Winnipeg’s Richardson International; a minority stake in a nitrogen fertilizer plant at Medicine Hat, Alta., to U.S. fertilizer firm CF Industries; and Australian malt processor Joe White Maltings, to U.S. agrifood giant Cargill.
The Reuters news agency last month reported Glencore is also seeking a buyer for Viterra’s U.S. pasta processing operation, Dakota Growers Pasta Co. — AGCanada.com Network