Wednesday, December 03, 2008

By AMY SCHWEITZER
Hub Regional Editor

HOLDREGE - Agri Co-op will remain Agri Co-op even if it merges with one of the largest agriculture cooperatives in the Midwest.

The Holdrege-based agricultural cooperative is considering merging with CHS Inc., formerly Cenex Harvest States, said Agri Co-op Manager Don Lien. A 'yes' vote of two-thirds its shareholder members would be required to approve the merger.

The date of the vote has not been set. Lien anticipates it will be in November.

Shareholders were sent a letter on Aug. 8 explaining the proposal and there was an information meeting Thursday night in Holdrege. Lien said customers will be informed, and more meetings will be scheduled soon in each of the 11 towns where co-ops are located to explain the details.

"We're having a very good year," Lien told the Hub. "The earnings are well ahead of last year, and we're very excited about the financial state of the company.

"Unfortunately, when people hear about change, they assume the worst," he said of untrue rumors that the co-op is going bankrupt.

The current structure has served the company well for 70 years, Lien said, "but will today's structure serve the next generation of producers?"

It was a question the Agri Co-op Board of Directors asked itself before deciding to pursue a merger with CHS, which Lien described as a local regionalization cooperative or local co-ops merging into a regional structure.

In addition to pursuing possible ties with the Inver Grove Height, Minn.-based CHS, Agri Co-op's directors discussed merging with neighboring Nebraska co-ops. Lien said the directors continue to research those possibilities.

He described CHS as a Fortune 500 company with "long-term financial stability." It had $17.2 billion in sales last year with $750 million in net income.

Lien said that if the merger with CHS is approved, there should be virtually no outward differences seen by customers bringing in grain or buying fertilizer or fuel at one of Agri Co-op's 11 facilities in south-central Nebraska. The current locations are: Holdrege, Loomis, Bertrand, Smithfield, Josselyn, Overton, Elm Creek, Alma, Roseland, Blue Hill and Bladen.

"We would have more capital to modernize our facilities," he said about the major change.

If a merger is approved, Agri Co-op would become a business unit of CHS. Current members of the co-op automatically would become shareholders, "dollar for dollar," in CHS, Lien said.

Co-op management would remain the same, and all 150 employees would be retained. The board of directors would become a producers' board that still would control activities of the co-op and its employees.

"It would be seamless," Lien said of the potential merger.