Agrium Enters Aussie Fertilizer War

Agrium, hungry to do a deal, bids more than $1 billion for Australian agri-business AWB, thus entering yet another three-way fertilizer takeover fray.
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CALGARY, Alberta (TheStreet) -- Agrium (AGU) , which failed earlier this year in its bid to acquire the fertilizer producer CF Industries (CF) - Get Report during the famed fertilizer wars, remains hungry for deals, this time bidding $1.1 billion for Australian agri-retailer, AWB.

It appears that Agrium has chosen to refocus its energies on growing its core retail business, which accounts for nearly three quarters of the company's revenue. It had looked as though Agrium would direct its attention toward the manufacturing and wholesale side of things. CF Industries, which eventually convinced

Terra Industries

to sell itself, thus

ending the fertilizer wars

, is a major player in the production of phosphate and nitrogen-based fertilizers.

>>Looking for Green in Fertilizer Stocks

But it also appears that Agrium has embroiled itself in yet another three-way battle. AWB had already agreed to merge with an Australian rival,

GrainCorp

, in a deal that values AWB at around $860 million Australian.

As Agrium made sure to point out in its press release announcing the deal Monday morning Australia time, Agrium's bid of 1.50 Australian dollars per share is 57% more than the closing price of AWB's stock on July 29, the day before the zero-premium deal with GrainCorp was announced (or "nil-premium," as they say in Australia).

AWB, a venerable outfit Down Under, is the nation's largest agricultural merchant, distributing fertilizers, herbicides equipment and other farm gear at about 400 retail depots. The company -- basically Australia's

Cargill

-- also works as a grain trader.

In morning trading Monday, Agrium shares were moving at $66.67, down 60 cents. Like all agriculture stocks, Agrium shares had been

rallying sharply since early July

on the back of rocketing crop prices. Most recently, the catastrophic Russian drought, and Moscow's ban on the export of wheat, had

driven global grain prices higher

.

-- Written by Scott Eden in New York

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>>Looking for Green in Fertilizer Stocks

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