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.
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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.
