Thursday, August 30, 2007

Agricore-United Sask Pool merge to form Viterra

So it looks like the last of the Farmer Co-operatives has vanished into the mists of history. It's a sad day in Canadian history.

From Reuters Canada:

Saskpool becomes Viterra in break with past
Thu Aug 30, 2007 3:49 PM EDT

By Roberta Rampton
BALGONIE, Saskatchewan (Reuters) - Saskatchewan Wheat Pool (SWP.TO: Quote) will now be known as Viterra, a name that means "life from the land" and better reflects the breadth of its business, Canada's largest grain handler said on Thursday.

The company unfurled its new name and logo 10 storeys above the Prairies on its modern Buffalo Plains concrete terminal east of the provincial capital Regina to a crowd of grain trade and Prairie political leaders.

The name change invoked nostalgia in the province, where "The Pool" was started in the 1920s as a co-operative by farmers who wanted better prices for their wheat and a share in patronage dividends. Chief Executive Mayo Schmidt admitted it will take time for the new name to catch on.

"I think it will take a while to make the change, and I think, in our hearts, we'll always see the legacy Pool," he said.

Saskpool went public more than a decade ago, and shed its farmer-controlled governance after a financial overhaul forced by a close call with insolvency.

Now New York fund Third Avenue Management LLC is Viterra's largest shareholder, with a 16 percent stake.

Earlier this year, Saskpool swallowed its larger competitor, Agricore United for C$1.8 billion ($1.7 billion), and the new name -- which some wags said sounded like the impotence drug Viagra -- is part of that transformation.

Agricore itself was a merger of three former farmer-owned grain handlers.

Kim McConnell of Adfarm, the Calgary, Alberta-based advertising agency that helped Saskpool choose the new name, admitted the Viagra connection had crossed his mind.

"Viagra would also be a good agriculture company name, wouldn't it?" he said in an interview.

"Certainly there's connotations that go one way or the other, but I think the more important thing is that Viterra stands for 'life from the land'," Schmidt said the company will trim its staff to around 4,000 people from 4,400 over the next 18 months. It has applied for a new ticker symbol to match the new name.

The new Viterra has a stock market value of C$2.15 billion and controls 58 percent of total grain handling capacity in Canada, with an expected market share of more than 40 percent.

The company's shares were down 2 Canadian cents at C$10.65 on the Toronto Stock Exchange on Thursday.

Aside from its Prairie-wide grain network and export terminal space, Viterra also owns crop supply retail centers, livestock and feed operations, an oat miller and other ventures.

Schmidt said the company is acquiring some new crop supply centers, and sees expansion opportunities in the United States and offshore, and in the fertilizer and biofuel sectors.

"Today, in the environment we're in the financial markets, every company is potentially a target," Schmidt said. "We're going to look for growth and acquisition opportunities going into the future."

($1=$1.06 Canadian)

© Reuters 2007. All Rights Reserved.