By Karl Plume
CHICAGO, July 6 (Reuters) - U.S. grain trader Cargill Inc
CARG.UL has agreed to sell its ag-retail business in the
United States to farming input seller and distributor Agrium Inc
AGU.TO , the companies said on Wednesday.
Calgary-based Agrium, North America's largest retail seller
of crop inputs like seed, fertilizer and pesticides, will
acquire 18 ag-retail locations in Nebraska, South Dakota,
Minnesota, Wisconsin, Michigan and Indiana. The businesses have
annual revenues exceeding $150 million.
The transaction, which does not include Cargill's Canadian
crop input business, is expected to close by the end of the
third quarter after a regulatory review, they said.
It is the latest transformative move for privately held
Cargill, which has been refocusing its operations by exiting
some lower-margin businesses and expanding into higher-margin
endeavors like food ingredients and aquaculture.
The 151-year-old grain trader is also trimming some
operations in the face of slumping commodities prices and
focusing on its core strengths such as grain trading and
processing. The company said in February that it would stop
selling seeds, fertilizer and crop chemicals in the Black Sea
region.
"Cargill will focus on being the world's leading merchant of
grain and oilseeds," said Roger Watchorn, Cargill's lead for the
North American agricultural supply chain.
Agrium, meanwhile, has been seeking to build or buy more
stores in the United States to claim a quarter of the market in
the country, CEO Chuck Magro told Reuters in May.
"The (Cargill) locations are in regions where we currently
have a limited presence," Magro said in a release on Wednesday.
The company bought 27 U.S. retail locations in the first
quarter.
Agrium shares were moderately higher Wednesday at C$115.75.
(Editing by David Gregorio)