Agrium Inc. informed its retail employees on Oct. 1 that as of January 2009, the company’s retail operations in the U.S. will operate exclusively under the Crop Production Services (CPS) name. This will include all current CPS and Western Farm Services Inc. (WFS) outlets, as well as the former United Agri-Products (UAP) facilities that came under Agrium’s ownership earlier this year.
“Since the closing of the UAP acquisition in May, numerous meetings and discussions have occurred relative to what our company name should be,” said Richard Gearheard, senior vice president of Agrium and president of Agrium Retail, in an Oct. 1 memo to Agrium’s retail employees. “Instead of narrowing our choices, each meeting produced additional suggestions. However, the one unanimous recommendation was that there should be only one company name. In order to achieve the benefits of being the largest agricultural input retailer, we must not appear divided.”
Agrium completed its $2.65 billion acquisition of UAP Holding Corp. in May (GM May 12, p. 1), and as a result, UAP joined WFS and CPS as wholly-owned U.S. retail subsidiaries of the company. With 433 locations in 31 states operating under the CPS and WFS brands, and some 370 UAP stores operating throughout the country at the time of the merger, Agrium is the largest retail farm store operator in the U.S. At the time of the UAP acquisition, an Agrium spokesman told Green Markets the company would have approximately 870 retail outlets, giving it just under 15 percent of the market and well ahead of second place rival Helena Chemical Inc.
WFS retail outlets are located in five western states, primarily California and the Pacific Northwest region, while CPS outlets are located in the Midwest, Northeast, and Southeast regions of the U.S. More than 200 of the 250 retail farm centers that Agrium acquired through its Royster-Clark acquisition in February 2006 now operate under the CPS name, with the remainder closed at the time of the acquisition.
Gearheard noted as well that the CPS logo is being changed, and signs and decals will be replaced at all facilities. Gearheard stressed in the memo that WFS and UAP facilities cannot change to the CPS name until the corporate entities have been legally merged, which he said should be completed by Jan. 1, 2009, barring any delays. While noting that “this decision will not be popular with everyone,” Gearheard asked for support among retail employees. “The success of our company is dependent upon our people, not our name,” he said. “I am requesting that you support this decision and the entire market will view us as one united entity.”
Agrium’s acquisition of UAP was first announced in December 2007 (GM Dec. 10, 2007, p. 1), but took another five months to complete while the company took steps to secure U.S. Federal Trade Commission approval of the deal. The FTC in May filed a consent order saying that Agrium had to sell five UAP farm stores in Michigan and two Agrium stores in Maryland and Virginia within 180 days of Agrium’s acquisition of UAP Holdings due to overlapping markets in which Agrium and UAP were direct competitors.
The FTC is currently considering a petition received from Agrium in early September (GM Sept. 8, p. 1) requesting approval of a proposed plan in which Agrium would divest the Farm Supply Assets to Helena Chemical Co. of Collierville, Tenn. The FTC accepted public comments on the proposed divestiture until Sept. 22, but has not yet announced its decision.
Agrium’s South American retail operations are conducted through its wholly-owned subsidiary, Agroservicios Pampeanos S.A., and consist of 31 outlets in Argentina and four outlets in Chile. These facilities will not switch to the CPS name.