Agrium to acquire UAP Holding

Source: Exec Digital Canada

Date :12/3/2007 10:09:50 AM

Agrium Inc. is to acquire UAP Holding Corp for US$2.65 billion, the Calgary-headquartered fertilizer giant said Monday which will put together the largest farm-inputs retailer in North America.

Agrium said it is offering US$39 per share in cash for UAP, a premium of 30 percent over Friday's closing price on the Nasdaq market. The $2.65-billion transaction value includes $487 million of assumed debt.

The boards of directors of both companies have unanimously approved the agreement while the UAP board of directors has unanimously recommended that the UAP shareholders accept the tender offer.

Strategic fit

Mike Wilson, President and CEO of Agrium said the acquisition of UAP is an excellent ‘strategic fit’ for Agrium, expanding its geographic base and product diversity.

“We believe the transaction will enable Agrium to capitalize on the strong outlook for agriculture markets and will allow us to deliver value to both our shareholders and our customers,” he said.

“It increases the scale and size of our business, further enhances stability of our earnings profile and strengthens Agrium’s ability to serve and grow its customer base.”

Key experience

Agrium anticipates annual synergies of US$115 million by 2010, with a majority of that captured in 2009.

A key factor to our success will be drawing from the extensive experience of employees from both organizations,” Mr. Wilson added.

The parties expect to complete the transaction in early 2008. Upon completion of the merger, UAP will become a wholly-owned subsidiary of Agrium.

December 3, 2007