Status Report: UAP Holdings - Agrium Inc.

Includes: NTR, UAPH
by: The M & A Researcher

Agrium Inc. (AGU) re-filed the HSR notification for its merger with UAP Holding Corp. (UAPH) on Monday, creating a second waiting period expiration date of February 26, 2008. AGU has issued the following statements regarding the HSR review process:

On January 11, 2008, following informal discussions with the staff (Staff) of the FTC, Agrium voluntarily withdrew its notification and report form in order to allow more time for the Staff to review the proposed acquisition. Since such withdrawal, Agrium has continued to provide the Staff, following its informal requests, with additional information about the businesses of Agrium and UAP.

Prior to the expiration of the waiting period under the HSR Act, Agrium may voluntarily withdraw and re-file its notification and report form again in order to provide the Staff with more time to review the proposed acquisition without requiring the Staff to issue a 'second request.' If a second request were to be issued, the closing of the acquisition of UAP would not be expected until the summer of 2008. There can be no assurance that the FTC will not issue a second request.

The very fact that the companies need the entire projected 30 days to re-file the HSR documentation suggests quite plainly that this case is very likely headed for a second request.

Again, there is a very small chance that a second request can be avoided based on the concept that the local/regional retail markets are often served by a single entity in this agricultural industry. However, the breadth of this combination is substantial, both from a national and more localized perspective. Even if divestitures are ultimately deemed unnecessary by the FTC, it is unlikely the regulator will be able to fully assess the impact of the transaction in the current HSR review time frame.

Therefore, a second request continues to be expected in this case despite the companies current efforts with the FTC. A close in the first quarter is naturally not anticipated, as the HSR review will very likely delay the transaction at least another two months.

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