(Bloomberg) -- Cargill Inc. agreed to sell a chain of farm-retail stores, the latest divestment by the U.S. agricultural giant as it focuses on its core crop-trading business following a slump in commodity prices and profits.
The sale comprises 18 outlets that sell crop-related items such as seed and fertilizer that had a combined annual revenue of more than $150 million, Calgary-based Agrium said Wednesday in a statement. The deal doesn't include Cargill's retail sites in Canada. No price for the sale was given.
The Agrium deal follows at least nine announced or reported divestments by Cargill in the past two years, according to data compiled by Bloomberg, as Chief Executive Officer David MacLennan reorganizes the company amid the commodity rout. MacLennan has consolidated a diverse group of 70 businesses into five groups and worked to match the product mix to customers' needs.
Asset Sales
Cargill is the largest closely held U.S. company and it still has a diverse range of businesses, from cattle slaughtering to the mining of deicing salt and the production of fish feed. The company also announced in November plans to scrap its two-tier executive leadership structure in favor of a single team.
Its Black River Asset Management investment unit has been broken up and spun off, while it sold its U.S. pork business to Brazil's JBS SA and exited steel production by selling a stake in an Ohio mill. Other recent asset sales by Cargill have included its dressings and mayonnaise unit and its crop-insurance business.
Cargill isn't the only one making changes. Archer-Daniels-Midland Co. and Bunge Ltd., rival U.S. commodity traders and processors, have also been reviewing their businesses as lower commodity prices squeeze margins. Agrium, the largest U.S. farm retailer, is buying Cargill outlets in Nebraska, South Dakota, Minnesota, Wisconsin, Michigan and Indiana to expand in the U.S.
“This acquisition demonstrates our continued focus on growing our North American Ag-retail business, particularly in the highly desirable U.S. Corn Belt," Agrium CEO Chuck Magro said in the statement. “The locations are in regions where we currently have a limited presence."
To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net. To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Robin Saponar
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