United Grain Growers/Agricore Merger

[charliep]

Just a note to highlight the UGG/Agricore merger. For more information see the UGG (www.ugg.com) and Agricore (www.agricore.com) websites.

Comments?

[TOM4CWB]

Charlie,

Sask Pool must really feel hurt today, could this could reck them if the Sask government doesn't back them up?

This Co-op Agricore United will be world scale and efficient, I hope we still have some competition when we are done between the farmer owned companies, or we will all suffer!

[TOM4CWB]

Charlie,

I think it is astounding that this merger has approval of both boards of directors because of the CWB monopoly issue. UGG is for marketing choice, and Agricore was not.

Which position will the new company take?

My money is on Marketing choice, because of the disgusting way the CWB has treated grain companies in the last year.

Isn't it Ironic that the CWB is speeding up consolidation by being crazed power hungry nuts with the monopoly?

This merger is likely to happen to counteract the CWB actions?

[charliep]

Tom4cwb

I will leave for others to discuss implications. My only comment is that grain companies live Dr. Jekyl and Mr. Hyde lives - a political and a business one.

Of more interest is the fact Agricore is changing its ownership structure. They have fought to remain a coop for a long time but it would appear - subject to ratification end of August - they have given up on this. In some sense it will be an opportunity for farm managers to capture some of their equiy out of Agricore at good value (both ADM and existing shareholders will want to up their ownership).

Has anyone else had time to think about implications?

[bbrindle]

Agricore/UGG are holding country meetings. I found the schedule at the UGG site, there is a menu on the left that mentions "Country Information" The first ones are August 7 in Vermilion and Vegreville. The first in Manitoba is Aug 8 and the first in Sask is Aug 14th.

http://www.ugg.com/corpweb/zandc/country_info/index.html

[hsiemens]

The Coop part is gone. 12 of 15 directors elected by farmers. Agricore had no choice other than to keep sliding. I attended the news conference in Winnipeg of the announcement. Smiling Ted and Brian certainly indicated who is in charge here. It's a UGG takeover plain and simple, not hostile but took-over. In Manitoba, it will be interesting what happens to the Manitoba Cooperator. Brian Hayward hates all publication especially a socialistic one says one insider. It's inevitable because the state of ag simply dictates this to happen. Some sore losing Agricore MPE holdovers will squawk, but it should move through.

[melvill]

I'm going to the merger info meeting in Lethbridge today. It'll be interesting to see what the Agricore/UGG customers have to say - if there's any there. I'm wondering if that area's farmers will be too busy farming (harvesting) to attend. I'll try to take decent notes.

In the meantime I talked to some of Dad's neighbors about the deal last night. These are all "senior" farmers and they're tickled pink that now they'll finally be able to get their equity out. They are feeling a little intimidated by the huge information package that went out. It's not a light or short read!

[Ron]

I think it is a shame not because of any idealogy about a co-op but because we will have that much less competition when selling our grain and eventually no independant input suppliers. I hate having to sell my production to the same source I get my inputs from. No good reason it just bothers me. I have an agricore 5 miles away and Louis Dreyfus is 15 miles away and since I can't afford to wait in line with a single axle I send my grain by super-B to Dreyfus. I know consolidation is inevitable but I really believe more, smaller, and independant dealers are better for the rural economy (be it fert, chem, grain sales or seed).

[melvill]

I was at the Agricore/UGG info meeting in Lethbridge on Friday. There was a great deal of technical material about before & after budgets, cost savings, futures share stucture, etc. Three or four things that made an impression on me were:
1. A farmer from Taber and I were sitting together. We were the youngest people there by at least 10 or 15 years.
2. An Agricore spokesman said that if this proposed merger does not proceed, Agricore's creditors will force the company to begin selling assets by this fall.
3. Agricore/UGG executives are most concerned with the Competition Bureau's response. Their stated concern was that "experts" from competing grain companies may suggestto the CB that this is a strongly anti-competitive merger with the motive of having the CB force Agricore or UGG to dispose of some facilities at a low cost.
4. There was only one question about reduced competition in the grain or farm supply sectors.
5. A bigger concern seemed to be the loss of co-op structure as a lobby with government.