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Agrium (AGU) Unit to Acquire Equity Stake in CH Biotech

Zacks Equity Research

Agrium (AGU) recently said that its subsidiary – Loveland Products – has agreed to purchase an equity interest in agricultural technology company – CH Biotech R&D Co., Ltd. The financial terms of the deal were not divulged by the companies.

CH Biotech makes and distributes plant health and nutrition technologies. Loveland Products is a global leader in high-performance crop input products catering to farmers in more than 40 nations. It is the proprietary products provider for Agrium Retail in North America, Australia and South America.

Under the deal terms, Agrium will get the right to secure exclusive global distribution rights to CH Biotech's existing plant health technologies and an access to new product and technologies. The agreement will also enable CH Biotech to join forces with Agrium to beef up their plant health-focused R&D initiatives.

Loveland Products currently markets a number of CH Biotech technologies including brands like Radiate, NutriSync and Consensus that are product technologies focused on improving root development, stress reduction and nutrient utilization.

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The strategic investment by Loveland Products will boost biotechnology R&D initiatives for next-generation plant health technologies. It will enable the entity to offer a diverse and highly complementary product range to address the changing requirements of farmers globally.

Agrium’s shares rose around 1.5% in the trading session last Wednesday. The stock closed the day at $98.14, gaining roughly 1%.

Agrium, in Aug 2014, said that Loveland Products has bought a controlling stake in agriculture biotechnology company, Agricen. The investment represents a part of Loveland Products’ long-term strategy of developing and marketing next-generation technologies which boost plant health and crop productivity.

Agrium, which is among the major fertilizer makers along with Potash Corp. (POT), Mosaic (MOS) and CF Industries (CF), follows a strategy to grow along the value chain through a combination of acquisitions and organic development. It stands to gain from overall strong fundamentals for the agriculture and crop input market.

Agrium is a Zacks Rank #3 (Hold) stock.

Read the Full Research Report on AGU
Read the Full Research Report on POT
Read the Full Research Report on CF
Read the Full Research Report on MOS


Zacks Investment Research