The Federal Trade Commission has received a petition from Agrium Inc. requesting approval of a proposed divestiture related to Agrium’s recent acquisition of UAP Holding Corp. Under the terms of the FTC consent order arising from the FTC’s challenge to the transaction, Agrium is required to sell five UAP farm stores located in Michigan, and two Agrium stores located in Maryland and Virginia, to an FTC-approved buyer within 180 days of acquiring UAP.
The divestitures are intended to remedy competitive concerns raised by the acquisition in the market for the retail sale of bulk fertilizer and related services by farm stores located in six geographic markets in or near the towns of Croswell, Richmond, Imlay City, Vestaburg, and Standish, Michigan; and Pocomoke City/Girdletree, Maryland. Through its petition, Agrium has requested FTC approval to divest the Farm Supply Assets to Helena Chemical Co. of Collierville, Tenn. Helena, a unit of Marubeni Corp., is not publicly listed. To date, the companies are keeping further terms of the deal confidential. Agrium said the amount was not material.
The FTC’s order requires that Agrium’s farm store located in Keller, Va., be sold with Agrium’s Snow Hill, Md., store, because the Keller location supplies the Snow Hill store in the relevant Pocomoke/Girdletree, Md. market with essential custom-blended fertilizer. In its petition, Agrium says that the order also provides that the Farm Supply Assets to be divested need not include assets “not needed by an acquirer” if the FTC approves the divestiture without the assets. In the divestiture proposed by Agrium, Helena would acquire all of the Farm Supply Assets excluding Agrium’s Keller store. Agrium contends Helena does not need the Keller location because Helena already has a farm supply store located less than eight miles from Keller in Tasley, Va. Agrium asserts the Tasley location can supply Snow Hill, Md.
Agrium further contends that requiring it to divest the Keller, Va., store to Helena “would reduce competition between Helena and Agrium in the Tasley/Keller, Va. area.”
The FTC is accepting public comments on the proposed divestiture though Sept. 22, 2008, after which it will decide whether to approve it. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. (Docket No. C-4219; the staff contact is Elizabeth Piotrowski, Bureau of Competition, 202-326-2623.)