Soon, there will be only one prairie wheat pool.
Manitoba Pool Elevators and Alberta Wheat Pool delegates voted unanimously last week to merge their two companies into one, effective Nov. 1.
The new firm will be known as Agricore, a name devised by a California-based consultant. Now only Saskatchewan Wheat Pool will be known as “the pool”, a term associated with the farmer-owned grain handling co-operatives since they were formed in the early 1920s.
“The current organizations individually have served their members extremely well over the years,” said MPE president Charlie Swanson. “But what we’re building for is the future and this merged organization will provide us with the opportunity to better serve our farmer members.”
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While some delegates said they regretted the absence of any reference to pools or co-ops in the new moniker, Alberta Pool vice-president John Pearson said he likes it.
“We don’t pool grain, we’re not wheat and we’re more than Alberta and Manitoba,” he told a July 31 news conference. “We wanted a name that said our business was agriculture, was new and indicated how excited we are.”
Following a meeting of more than 140 delegates from the two companies, officials from MPE and AWP also announced:
- The company will have its head office in Winnipeg, although some divisions will be based in Calgary. Officials said it’s too early to say how many jobs will be eliminated as a result of the merger.
- The chief executive officer will be Gordon Cummings, who now holds the position with Alberta Pool.
- An interim delegate body and board of directors will over the next couple of months deal with issues such as bylaws, democratic structure and governance. About two-thirds of the delegates and directors will be from Alberta. The board of directors will elect a president.
- Agricore will be a traditionally financed co-operative, although Pearson said there is nothing to stop the new company from issuing public shares if the delegates choose. It will adopt Alberta Pool’s equity plan.
- The firm will do business in Saskatchewan, investing in grain handling facilities and buying farm service centres there.
- Agricore will take over the ownership shares in joint ventures in which the Alberta and Manitoba Pools are currently involved. Those which have been based on an equal three-way split among the three pools may be renegotiated.
Richard Lemoing, a Manitoba delegate from Minnedosa, said the two days of discussion produced lots of technical questions but few surprises.
“I wouldn’t want to say it was a done deal, but we had already discussed in our respective organizations the need to do some strategic move to meet the competition,” he said. “We’ve been talking about this at least 10 years.”
The two pools began seriously pursuing a merger in April, after preliminary merger discussions among all three pools broke down. Last year, the two companies failed in a hostile takeover bid of United Grain Growers.
Both those moves were prompted by the belief that small, regionally based grain companies can no longer prosper under the globalized business environment in which the grain industry now operates.
“They really have no choice from a business perspective,” said David Schroeder, a grain business analyst with Dominion Bond Rating Service.
Peter Galloway, an AWP delegate from Fort Saskatchewan, said the delegates are being true to the spirit of the pioneers who founded the two companies in the 1920s.
“Their legacy is not elevators or names,” he said. “Their legacy is taking ownership of your company and this is an opportunity to carry that on.”
