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Richardson, CF close deals for Viterra assets

Sales of port terminal stake to Richardson, stores to Agrium pending

A number of Viterra's grain elevators, mills and other former assets of the Prairie grain-handling giant are now officially under new management.

Viterra, Canada's biggest grain handler and now an arm of Swiss commodity firm Glencore, announced Wednesday it has formally completed deals to sell certain Viterra assets to Richardson International, and to sell a stake in an Alberta nitrogen fertilizer plant to CF Industries.

New signage is now on order for 19 Viterra elevators and the 13 crop input centres co-located with those elevators, all of which are now officially branded Richardson Pioneer.

The deal marks a substantial boost in capacity for Richardson Pioneer -- the Prairie grain handling arm for Winnipeg-based Richardson -- and marks "an important milestone in our company history... as we celebrate the 100th anniversary of Richardson Pioneer in 2013," Richardson International CEO Curt Vossen said.

From a grain handling perspective, the deal is expected to give Glencore and Richardson roughly equal market shares of about 34-36 per cent on the Prairies, up from about 24-25 per cent for Richardson and down from 42 per cent for Glencore.

Elevators sold in this deal are at Dawson Creek and Fort St. John, B.C.; Lacombe, Lavoy, High Level, Vulcan and Provost, Alta.; Assiniboia, Carrot River, Davidson, Kindersley, Alameda, Melville, Langenburg, Maple Creek, White City and Unity, Sask.; and Letellier and Arborg, Man.

Viterra's Can-Oat Milling business, with oat processing plants at Portage la Prairie, Man., Martensville, Sask. and Barrhead, Alta., will also now be branded Richardson Milling, as will the 21st Century Grain Processing oat plant at South Sioux City, Neb. and wheat mill at Dawn, Tex.

Can-Oat and 21st Century together had made Viterra the largest oat miller in North America. Richardson's interests in food processing until now had been mainly in cooking oils, margarines and shortenings, connected to its canola processing plants.

The sale to Richardson is also now finalized for one of Viterra's three port terminals at Thunder Bay, Ont.

Richardson, which already operates a 208,500-tonne capacity terminal at Thunder Bay, said the deal "will increase capacity and enhance the company's operations through that port."

Glencore's other deal closing Wednesday was for its 34 per cent stake in the Canadian Fertilizers Ltd. (CFL) nitrogen processing plant at Medicine Hat, Alta.

That stake now belongs to the plant's majority owner, U.S. fertilizer firm CF Industries, for the price of $175 million plus working capital.

The Medicine Hat facility has two ammonia plants with total annual capacity of 1.25 million tons, plus a urea plant with annual capacity of 810,000 tons.

Illinois-based CF said in a release Tuesday that the Viterra deal increases its total annual marketable nitrogen volume by about 425,000 gross tons of ammonia and 275,000 tons of urea.

Glencore had previously agreed in March to sell the Medicine Hat stake to Agrium, the Calgary-based fertilizer giant. Agrium gave up that stake to CF in a separate agreement announced in August.

Store by store

Agrium's $915 million deal with Glencore to buy 232 of Viterra's 258 Canadian agri-product retail outlets, plus all of Viterra's 17 ag retail facilities in Australia, still awaits approval from Canada's Competition Bureau.

Richard Downey, Agrium's vice-president of corporate relations, said the Competition Bureau's approval process for its transaction had been expected to take longer than it would for Glencore's deal with Richardson, as the bureau evaluates the locations of each individual store and facility included in the deal.

Downey, when asked, wouldn't speculate Wednesday as to how much longer the bureau's approval process will take. Agrium CEO Mike Wilson was quoted in November 2012 as saying the company hoped to close its deal late in the first quarter of 2013.

One piece also remains to be finalized in Glencore's deal with Richardson: a 25 per cent stake in Viterra's Cascadia port terminal at Vancouver.

A Richardson spokesperson said Wednesday the details are still being finalized on the sale of the Cascadia share, but the company doesn't expect it will take much longer for the deal to be completed.

Related stories:
Richardson cleared for West Coast terminal expansion, April 15, 2013
Richardson cleared to buy into Viterra's handle,
Dec. 20, 2012
That's a wrap: Glencore now running Viterra,
Dec. 17, 2012
Agrium sees owning Viterra farm stores early next year,
Nov. 16, 2012



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