Agrium Acquires UAP Holding Corp.

Agrium entered into a definitive agreement to acquire UAP Holding Corp. for $2.65 ­billion.

Under the terms of the agreement, a wholly ­owned subsidiary of Agrium will commence a tender offer to purchase all of the outstanding common stock of UAP for $39 per share in cash. The transaction includes an estimated $487 million of assumed debt.

The all cash purchase price represents a 27 percent premium over the volume weighted­average trading price for UAP shares on the NASDAQ for the 20 trading days ended Nov. 30 and a premium of 30 percent over the closing price of $29.91 per share on that date. The boards of directors of both companies have unanimously approved the agreement, and the UAP board of directors has unanimously recommended that the UAP shareholders accept the tender offer.

“The addition of UAP's business to our own retail operations is an excellent strategic fit for Agrium and a significant step in our strategy of continuing to grow and transform the company," says Mike Wilson, president and c.e.o. of Agrium. "The acquisition will significantly expand our geographic base and our product diversity, and will offer an opportunity to leverage strengths of both companies. 

“We anticipate we will be able to generate annual synergies of approximately $115­ million by 2010, with a majority of this captured in 2009. We expect that these synergies will be achieved primarily by improved margins on all three crop input product groupings, largely through enhanced purchasing efficiencies."

Agrium plans to arrange financing of $1.25­ billion in equity, with the balance in public and bank term debt to replace the bridge loan.

“This transaction represents an extraordinary opportunity for our shareholders, customers, and employees,” says Kenny Cordell, c.e.o. and president of UAP. “Agrium is well respected in the industry and we believe that the combination of the two organizations will allow for an improved product offering and new services and technologies to be delivered to a broader range of customers.”

For more information, visit www.uap.com