09/05/2013 07:02 EDT | Updated 11/05/2013 05:12 EST

Competition Bureau and Agrium reach settlement in Viterra Inc. purchase

CALGARY - The Competition Bureau of Canada has given fertilizer producer Agrium Inc. the green light to buy a large chunk of Viterra Inc.'s retail agri-products business from Glencore Xstrata PLC.

The independent law enforcement agency said late Thursday it had concluded that the originally proposed sale would've likely led to a substantial lessening or prevention of competition for farmers in Alberta and Saskatchewan.

But after raising the concerns with Agrium (TSX:AGU), it has now reached a consent agreement that would see Agrium divest seven retail stores and nine anhydrous ammonia businesses. Agrium will also supply anhydrous ammonia to any purchaser of the divested assets for up to four years at prices that will not exceed what is charged at its retail outlets in those two provinces.

"I commend the merging parties for their cooperation throughout the merger review and for reaching this agreement that will preserve competition in the retail supply of anhydrous ammonia and urea in Alberta and Saskatchewan," said John Pecman, the bureau's commissioner in a statement.

"The bureau is committed to ensuring that Canadians have competitive prices and product choices."

Calgary-based Agrium said the deal will see it acquire 210 retail stores from Viterra across Western Canada, in addition to 13 locations in Australia that were announced in June.

The company said the sale was expected to be finalized in "the coming weeks."

"We are confident that by combining Viterra's deep knowledge of Western Canadian agriculture with Agrium's experience as the largest agricultural input retailer in the world, we will be able to provide an expanded and highly competitive offering of products, services and technologies, while maintaining strong local relationships," said Mike Wilson, Agrium's president and chief executive in a release.

Financial details of the sale were not immediately disclosed.

Swiss commodity broker Glencore acquired Viterra for $6.1 billion last year. The Glencore deal included a side agreement to sell a portion of Viterra's business to two other Canadian companies — Agrium Inc. and Richardson International.

Agrium produces three main types of fertilizer: nitrogen, phosphates and potash. It also sells crop nutrients, seeds and other products at retail centres in North America, Australia and South America.