Ag Headlines on Mergers, Friday Sept 9, 2016

Farm Credit Associations’ Boards Vote For Merger

The Boards of Directors’ of 1st Farm Credit Services, AgStar Financial Services, and Badgerland Financial unanimously voted to recommend a merger of their three associations to their respective members and stockholders.  The next steps will include a review and approval by AgriBank, which is the funding bank for the three association, as well as a regulatory review and approval by the Farm Credit Administration.  Both are scheduled to happen later in 2016.  The proposed merger decision will be finalized with a stockholder vote in 2017.  Some of the key decisions reached during the early discussion include Rod Hebrink, president and CEO of AgStar Financial Services, leading the proposed merged association.  The headquarters of the proposed association will be in Sun Prairie, Wisconsin.  All office locations will remain with the proposed merged association.  “The three associations share the same values and commitment to rural communities and agriculture, which will carry over into the proposed merged association,” said Gary Ash, President and CEO of 1st Farm Credit Services.

Grassley Sets Consolidation Hearings

Iowa Republican Senator Chuck Grassley, Chair of the Senate Judiciary Committee, said his committee will hold hearings on proposed consolidation in the chemical and seed sectors of agriculture. The Hagstrom Report says his announcement comes at the same time that Bob Young, Chief Economist from the American Farm Bureau Federation, expressed concerns about the three corporate mergers currently being considered. Grassley will hold the hearing on September 20, telling reporters that “if the mergers go through, you’d have a big three instead of a big six.” Grassley is referring to the proposed mergers of Dow and DuPont, the ChemChina plan to buy Syngenta, and the offer by Bayer to buy Monsanto. An article in the Financial Times reported yesterday that Young said, “Any one of the proposed mergers would have been okay, but to have three of them hit at once, it kind of makes one wonder.” Young said he’s concerned about the cost of inputs for farmers. “The obvious concern is would the mergers bring you to a point where they charge more than would otherwise be the case with more competition,” said Young.

Source:  NAFB News