Agricore United
Encyclopedia
Agricore United was a farmer-directed agri-business in Canada. It supplied crop nutrition and crop protection products, and offered grain handling and marketing services. It was created on November 1, 2001 by the merger of Agricore and United Grain Growers
. It was headquartered in Winnipeg, Manitoba. Its shares were publicly traded on the Toronto Stock Exchange (TSX) under the symbol "AU" ("AU.LV" - Limited voting common shares; "AU.DB" - Convertible 9% debentures; "AU.PR.A" - Series ‘A’ preferred shares) until June 15, 2007, when it was taken over by the Saskatchewan Wheat Pool
. Agri-business giant Archer Daniels Midland
(ADM) had a 28% stake in the company at the time of the takeover.
Limited (UGG). In 1923, the Alberta Wheat Pool
(AWP) was incorporated under the laws of Alberta. In 1924, Manitoba Pool Elevators (MPE) was incorporated under the laws of Manitoba. In 1992, UGG was continued under the Governing Act, a Special Act of the Parliament of Canada. In 1998 AWP and MPE merged to form Agricore Cooperative Limited. In 2001, UGG combined its business operations with Agricore Cooperative Ltd. and began doing business as Agricore United.
("SaskPool", "SWP") of Regina, Saskatchewan
and Winnipeg
-based James Richardson International ("JRI"). The initial and subsequent offers from SaskPool involved a stock swap, with no or little cash being offered, prompting the AU Board of Directors to reject them. In February 2007, AU and JRI announced that they had negotiated a merger arrangement to form a publicly traded company to be known as "Richardson Agricore", subject to shareholder agreement.
A subsequent bidding war led to a stock+cash offer from SaskPool and an all-cash offer from JRI to form a private company; a higher, $20.50 all-cash offer from SaskPool in May eventually prevailed, with 81% of the limited voting shares being tendered to the Pool by shareholders by the end of May, including all the ADM shares. This exceeded the 75% required by the terms of AU's incorporation to change the corporate structure and, after a special shareholders' meeting in June, AU became a wholly owned subsidiary of the Saskatchewan Wheat Pool. AU's CEO, Brian Hayward, resigned, as did the Board of Directors, and SaskPool's CEO and Board were voted in. SaskPool had Agricore United's common and preferred shares delisted from the Toronto Stock Exchange
(TSX) on June 20, 2007, and the members of the senior management team for the amalgamated company were announced the next day. As of June 29, no decision had been reached on the name or location of the new company, and it was expected to take about 12 months to complete the merging of the company's operations.
As a result of the acceptance of the SaskPool offer, JRI received a $35 million termination fee and was able to purchase a number of AU's grain and farm supply facilities; Cargill
Canada was able to make a similar purchase, as part of a pre-merger deal width SaskPool to satisfy Canada's Competition Bureau. AU employees, along with the grain and farm supply inventories at the affected facilities, were transferred to the purchasing companies.
It is generally believed within the Canadian agricultural industry that the biggest winners in the transaction were AU's shareholders, with SaskPool paying too much for AU, and that SaskPool gave up too many facilities to their competitors. Substantial number of head office employees are expected to be laid off once the integration of the two companies is complete.
On August 30, 2007, the company formerly known as Agricore United ceased to exist and Saskatchewan Wheat Pool was rebranded to be known as Viterra
.
United Grain Growers
United Grain Growers, or UGG, was a Canadian grain distributor. Founded in 1906 in Winnipeg, UGG was active in grain sales, crop inputs and livestock production services...
. It was headquartered in Winnipeg, Manitoba. Its shares were publicly traded on the Toronto Stock Exchange (TSX) under the symbol "AU" ("AU.LV" - Limited voting common shares; "AU.DB" - Convertible 9% debentures; "AU.PR.A" - Series ‘A’ preferred shares) until June 15, 2007, when it was taken over by the Saskatchewan Wheat Pool
Saskatchewan Wheat Pool
The Saskatchewan Wheat Pool was a grain handling, agri-food processing and marketing company based in Regina, Saskatchewan. The Pool created a network of marketing alliances in North America and internationally which made it the largest agricultural grain handling operation in the province of...
. Agri-business giant Archer Daniels Midland
Archer Daniels Midland
The Archer Daniels Midland Company is a conglomerate headquartered in Decatur, Illinois. ADM operates more than 270 plants worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial and animal feed markets worldwide.ADM was named the...
(ADM) had a 28% stake in the company at the time of the takeover.
Ancestry
Agricore United was the continuation of several companies with deep historical roots in western Canada. The Grain Growers' Grain Company Limited was originally incorporated in 1906 under the laws of Manitoba. In 1917, The Grain Growers' Grain Company Limited and The Alberta Farmers' Cooperative Elevator Company Limited amalgamated to form United Grain GrowersUnited Grain Growers
United Grain Growers, or UGG, was a Canadian grain distributor. Founded in 1906 in Winnipeg, UGG was active in grain sales, crop inputs and livestock production services...
Limited (UGG). In 1923, the Alberta Wheat Pool
Alberta Wheat Pool
The Alberta Wheat Pool was the first of Canada's wheat farmer co-operatives.-Early years:In 1923, the United Farmers of Alberta met with then Attorney General John Edward Brownlee to consider setting up a Wheat Pool just in Alberta...
(AWP) was incorporated under the laws of Alberta. In 1924, Manitoba Pool Elevators (MPE) was incorporated under the laws of Manitoba. In 1992, UGG was continued under the Governing Act, a Special Act of the Parliament of Canada. In 1998 AWP and MPE merged to form Agricore Cooperative Limited. In 2001, UGG combined its business operations with Agricore Cooperative Ltd. and began doing business as Agricore United.
Takeover
In November 2006, the company became the target of takeover bids from two other rival grain handlers: the Saskatchewan Wheat PoolSaskatchewan Wheat Pool
The Saskatchewan Wheat Pool was a grain handling, agri-food processing and marketing company based in Regina, Saskatchewan. The Pool created a network of marketing alliances in North America and internationally which made it the largest agricultural grain handling operation in the province of...
("SaskPool", "SWP") of Regina, Saskatchewan
Regina, Saskatchewan
Regina is the capital city of the Canadian province of Saskatchewan. The city is the second-largest in the province and a cultural and commercial centre for southern Saskatchewan. It is governed by Regina City Council. Regina is the cathedral city of the Roman Catholic and Romanian Orthodox...
and Winnipeg
Winnipeg
Winnipeg is the capital and largest city of Manitoba, Canada, and is the primary municipality of the Winnipeg Capital Region, with more than half of Manitoba's population. It is located near the longitudinal centre of North America, at the confluence of the Red and Assiniboine Rivers .The name...
-based James Richardson International ("JRI"). The initial and subsequent offers from SaskPool involved a stock swap, with no or little cash being offered, prompting the AU Board of Directors to reject them. In February 2007, AU and JRI announced that they had negotiated a merger arrangement to form a publicly traded company to be known as "Richardson Agricore", subject to shareholder agreement.
A subsequent bidding war led to a stock+cash offer from SaskPool and an all-cash offer from JRI to form a private company; a higher, $20.50 all-cash offer from SaskPool in May eventually prevailed, with 81% of the limited voting shares being tendered to the Pool by shareholders by the end of May, including all the ADM shares. This exceeded the 75% required by the terms of AU's incorporation to change the corporate structure and, after a special shareholders' meeting in June, AU became a wholly owned subsidiary of the Saskatchewan Wheat Pool. AU's CEO, Brian Hayward, resigned, as did the Board of Directors, and SaskPool's CEO and Board were voted in. SaskPool had Agricore United's common and preferred shares delisted from the Toronto Stock Exchange
Toronto Stock Exchange
Toronto Stock Exchange is the largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalisation. Based in Canada's largest city, Toronto, it is owned by and operated as a subsidiary of the TMX Group for the trading of senior equities...
(TSX) on June 20, 2007, and the members of the senior management team for the amalgamated company were announced the next day. As of June 29, no decision had been reached on the name or location of the new company, and it was expected to take about 12 months to complete the merging of the company's operations.
As a result of the acceptance of the SaskPool offer, JRI received a $35 million termination fee and was able to purchase a number of AU's grain and farm supply facilities; Cargill
Cargill
Cargill, Incorporated is a privately held, multinational corporation based in Minnetonka, Minnesota. Founded in 1865, it is now the largest privately held corporation in the United States in terms of revenue. If it were a public company, it would rank, as of 2011, number 13 on the Fortune 500,...
Canada was able to make a similar purchase, as part of a pre-merger deal width SaskPool to satisfy Canada's Competition Bureau. AU employees, along with the grain and farm supply inventories at the affected facilities, were transferred to the purchasing companies.
It is generally believed within the Canadian agricultural industry that the biggest winners in the transaction were AU's shareholders, with SaskPool paying too much for AU, and that SaskPool gave up too many facilities to their competitors. Substantial number of head office employees are expected to be laid off once the integration of the two companies is complete.
On August 30, 2007, the company formerly known as Agricore United ceased to exist and Saskatchewan Wheat Pool was rebranded to be known as Viterra
Viterra
Viterra Inc. is a leading global agri-business with extensive operations in Canada, the United States, Australia and New Zealand. With a growing international presence that includes trading and marketing offices on four continents, Viterra delivers high quality nutritious food ingredients to more...
.
Grain handling and merchandising
Agricore bought, marketed and transported grain, oil seeds and other special crops from the farm to end-use markets using the company’s network of grain elevators from Manitoba to British Columbia and ownership/interest in port terminals in Vancouver, Thunder Bay and Prince Rupert. The grain was moved from the farmer’s field to the company’s geographically dispersed and strategically located country elevator network. Grain was then shipped to a domestic, U.S. or Mexican customer, such as a flour mill, crushing plant, feed mill or maltster, or to a port terminal for export to end-use customers in Europe, South America, the Pacific Rim, Africa and the Middle East.Crop production services
The company sold more crop inputs in western Canada than any other company. This included manufacture, distribution and crop production support, including crop nutrition and crop protection products, seed and agronomic services to farmers, through about 200 locations from Manitoba to British Columbia. Agronomic Crop Enhancement (ACE) specialists provide technical advice on crop production issues and help the Customer Service Representative (CSR) advise the grower about choices for the most profitable crop practices. Beyond offering crop nutrition such as fertilizers, more than 200 crop protection products were offered including herbicides and insecticides. Agricore owned or leases three distribution warehouses, and supported the sale of crop nutrition and protection products by providing custom application services directly or through third-party contractors.Livestock
The company's livestock business formulated and manufactured feed for dairy and beef cattle, swine, poultry and other specialty feeds from seven HACCP certified feed mills, one HACCP certified pre-mix manufacturing centre and one HACCP compliant pre-mix manufacturing centre. The company had feed mills and pre-mix facilities service customers in B.C., Alberta and Manitoba, including two new feed mills constructed in Olds, AB (2000) and Edmonton, AB (2004).External links
- Former website (June 6, 2007 snapshot from the Internet ArchiveInternet ArchiveThe Internet Archive is a non-profit digital library with the stated mission of "universal access to all knowledge". It offers permanent storage and access to collections of digitized materials, including websites, music, moving images, and nearly 3 million public domain books. The Internet Archive...
) - Viterra corporate website