A Minnesota cooperative is considering a new acquisition offer ahead of voting on a $200 million takeover bid from CHS.
CHS facing competition for its $200M offer to buy West Central cooperative
Minnesota-based CHS also reported a $1.1 billion annual profit Wednesday.
The Minnesota Star Tribune
November 6, 2024 at 9:07PM
North Dakota-based Arthur Cos. is offering $250 million for West Central Ag Services, headquartered in Ulen, Minn. The private company recently publicized its pitch to the cooperative online with what it calls a “superior” deal.
West Central Ag Services patrons (a group of customers and members) were scheduled to vote Thursday on the CHS merger proposal. On Wednesday, the co-op pushed the vote to Nov. 26.
Inver Grove Heights-based CHS and West Central Ag Services signed a nonbinding letter of intent to merge in May.
“We believe strongly in the value of the cooperative system and think CHS is a great home for West Central Ag Services,” said Rick Dusek, CHS executive vice president of ag retail, distribution and transportation. “CHS is a farmer-owned cooperative that connects farmers to a global supply chain while providing value back to owners.”
Arthur Cos. CEO James Burgum, nephew of outgoing North Dakota Gov. Doug Burgum, wrote in a letter that the company made an offer this spring but could not get an audience with management.
“The purpose of our outreach is not to debate the merits of the proposed merger with CHS,” Burgum wrote. “Rather we want to make all the facts available prior to the vote.”
West Central Ag Services CEO Jesse McCollum told AgWeek the cooperative is considering the offer. He did not immediately respond to a request for comment Wednesday.
West Central, which largely operates in the Red River Valley, had $767 million in revenue in 2023 and $34 million in profits..
Meanwhile, CHS on Wednesday reported a $1.1 billion profit on $39.3 billion in revenue for its fiscal year that ended in August.
Lower commodity prices affecting agribusinesses worldwide were largely to blame for the 72% drop in profit following a record year of earnings in 2023. Energy profits were especially squeezed at the nation’s top-grossing agricultural cooperative.
“We remain committed to strategically investing in strengthening our grain, agronomy and energy supply chains to provide end-to-end value and enhance market access for U.S. growers,” CHS CEO Jay Debertin said in a prepared statement. “As our industry navigates a challenging market environment, CHS is focused on efficiency and managing costs while still enhancing customer experience and driving growth on behalf of our owners.”
Minnesota-based CHS also reported a $1.1 billion annual profit Wednesday.
