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West Central Ag Services announces it will delay vote on $200 million CHS merger

Two days after Arthur Companies approached patrons of West Central Ag Services about buying the cooperative for $250 million, the co-op has delayed a vote on merging with CHS in a $200 million deal.

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West Central Ag Services operates in northwestern and central Minnesota.
Courtesy / West Central Ag Services

ULEN, Minn. — West Central Ag Services has announced it will delay a vote on whether the western Minnesota ag cooperative will merge with CHS in a $200 million deal until later in November.

West Central Ag Services and CHS , and a vote had been scheduled for Thursday, Nov. 7. According to a Facebook post from West Central, the vote on whether to merge with the world's largest ag cooperative now is scheduled for Tuesday, Nov. 26.

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James Burgum
Contributed / Arthur Companies

James Burgum, CEO of Arthur Companies, said his company has been interested in purchasing West Central for $250 million since the spring. West Central's leadership had dismissed an earlier proposal from Arthur Companies, with Burgum taking it at the time that his company had been outbid by CHS.

He said that when officials in his company learned their bid had not been lower but just needed to be restructured to take into account tax implications, Arthur Companies took its new proposal straight to members on Monday, Nov. 5, via a website, and text messages to the farmer-owners of West Central.

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West Central Ag Services CEO Jesse McCollum on Tuesday said the cooperative was looking into the Arthur Companies' proposal.

"We’re grateful for the leadership of West Central’s board of directors for giving their growers the appropriate time and space to evaluate both of these offers. The Arthur Companies would welcome the opportunity to meet with the board and answer any questions they have about our offer," Burgum said in a statement on Wednesday.

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CHS logo
Courtesy / CHS

West Central Ag Services, based in Ulen, with additional locations in northwestern and central Minnesota, offers crop nutrients, seed, crop protection products, producer financing, crop insurance, grain marketing, and tires and repair.

CHS, based in Inver Grove Heights, is the largest farmer-owned agricultural cooperative in the U.S. and is diversified into energy and lubricants — with the Cenex brand — animal nutrition, oilseed products and agronomy services and products. The two cooperatives are partners in a joint venture based in Hannaford, North Dakota, called , which was formed in 2009.

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McCollum said the idea behind merging the two companies is about strengthening supply chains and building for the future, while maintaining the cooperative model they both share.

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Arthur Companies logo
Courtesy / Arthur Companies

But Burgum said Fargo, North Dakota-based Arthur Companies also shares services and access to market with West Central Ag Services. Arthur Companies was founded in 1906 and operates grain and agronomy businesses in North Dakota and and also operates fertilizer, wheat and "proprietary trading businesses," according to its website. It also is partnered with food and ingredients business Anchor Ingredients.

Jenny Schlecht is the director of ag content for Agweek and serves as editor of Agweek, Sugarbeet Grower and BeanGrower. She lives on a farm and ranch near Medina, North Dakota, with her husband and two daughters. You can reach her at jschlecht@agweek.com or 701-595-0425.
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