Three Ag Co-ops Poised for Merger
Following months of due diligence, three Iowa ag co-ops offering grain, feed, energy, agronomy and timber services are set to merge. The Board of Directors for United Farm Cooperative (UFC), Farmers Elevator Cooperative (FEC), and Cooperative Elevator Association (CEA) have approved a proposed plan of merging the three companies. The proposed unification will now be voted upon by the Class A members of the three companies.
A team of 57 employees and six consultants worked together to create the proposed structure of the new company, and eleven informational meetings were held between the UFC, FEC and CEA to inform members of the potential changes and benefits that will result from the merge.
The new entity will have stronger buying power, market power and market intelligence, and will be able to capitalize on a wider span of assets in the agronomy, grain and feed segments of the business. All three companies will have representation on the new board of directors, and all management teams and employees will remain in place. Cost savings will be accomplished through divisional synergies, inventory controls, and logistics.
Ballots were mailed on March 30 to all Class A members of the three companies. A minimum of 50% of members must vote, and a two thirds majority of the returned vote must be in favor of the merger for the deal to move forward.