OTTAWA (Staff) – Investment Canada last week approved sale of Ontario’s largest farm service co-operative to a large American farm supply co-op.
Federal approval was the final hurdle GROWMARK Inc. of Bloomington, Ill., needed to acquire the assets of United Co-operatives of Ontario, including feed mills, dry fertilizer storage facilities, a distribution centre, 50 percent ownership in a petroleum distribution company and four percent ownership in CF Industries, the world’s largest fertilizer supply company.
The sale was negotiated last autumn and approved by member co-operatives of UCO in late December, pending federal approval of a foreign investment.
Read Also
AI expected to make itself felt in food systems
Artificial intelligence is already transforming the food we eat, how farmers produce it and how it reaches the consumer, experts say
It marked the end of a long struggle by UCO to survive.
Forty member co-ops
UCO was the largest farm supply and marketing co-op in Ontario, recording 1994 sales of $179 million through 40 member co-ops, several affiliates and 21 independent dealers. It offered a variety of inputs, consumer goods and services throughout rural Ontario.
However, during the 1980s, many of the member co-ops found themselves strapped for cash and unable to expand to meet member demands.
Last year, GROWMARK offered to ride to the rescue.
The large regional American co-op, owned by 90 local co-ops in Illinois, Iowa and Wisconsin and recording 1994 sales of $1.2 billion, offered $45 million for the assets of UCO.
In return, the member Ontario co-ops agreed to invest $4.5 million for stock ownership and two board-of-director seats.
GROWMARK agreed to hire 200 UCO employees.
A statement from GROWMARK said it was the first time the American giant had moved into Canada.
A statement from UCO said the move into the orbit of the U.S. co-op was the only way to guarantee the Ontario co-op network could be maintained.
