Canada okays Agrium UAP bid, no US approval yet

21 January 2008 17:30  [Source: ICIS news]

HOUSTON (ICIS news)--Agrium said on Monday it has received notice that Canada's competition regulator will not block the fertilizer firm's $2.65bn (€1.80bn) friendly takeover of US-based United Agri Products (UAP).

But the deal, originally announced on 3 December, still needs approval from the US Federal Trade Commission (FTC).

"We're still confident we can close the transaction, it's just a matter of timing," said Ashley Harris, Agrium's manager of investor relations.

Agrium said on 14 January that following informal talks with US regulators, it intended to refile its notification of the deal within 30 days in the hope of obviating a "second request" from the FTC for more information about the fertilizer market.

That notification has not been refiled yet, but once it was there would be a 15-day waiting period before the FTC response, said Harris.

While Agrium said the fertilizer sector was an industry with strong competition, there was no guarantee that the so-called second request would not be made by the regulator, he said.

If that were to happen, the merger may not be completed until the northern hemisphere summer, Harris said.

Calgary-based Agrium's offer for UAP stock has already been extended to 25 February from a previous deadline of 17 January, to allow more time for regulatory approval.

As of midnight on 17 January, 35.8m shares in UAP had been tendered to Agrium's offer, representing 68% of the US company's equity.

Agrium was a favourite among investors in 2007 as it surfed the wave of booming North American fertilizer demand that has been spurred in large part by soaring demand for corn as a feedstock for ethanol, which now consumed around a quarter of the US crop.

Its share price more than doubled over the course of last year, reaching a peak of $76.14 in December.

It has since slipped alongside a broader retreat in US stock markets, and closed at $57.98 on Friday. US financial markets are closed on Monday for a holiday.

($1 = €0.68)

By: Stephen Burns
+1 713 525 2653

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