I found this article on Bloomberg today:

Agrium Inc., the largest U.S. supplier of seeds, fertilizer and pesticides, made an unsolicited $3.6 billion bid for CF Industries Holdings Inc. to triple capacity for making phosphate and nitrogen crop nutrients.

The $72-a-share proposal, 30 percent more than CF’s closing price yesterday, seeks to derail CF’s $2.4 billion plan to acquire rival Terra Industries Inc. Agrium said in a statement it tried to buy CF in 2005 and has followed the company since then.

Agrium Chief Executive Officer Mike Wilson has been expanding in the U.S. as higher crop prices boost demand for fertilizer and last year bought UAP Holding Corp. for $2.6 billion to add stores and products. Acquiring CF would triple Agrium’s capacity to produce phosphate and urea ammonium nitrate and save $150 million in costs a year, Wilson said today.

Who cares? I do. As companies start expanding capacity in products that are around their overall peak supply, the likelihood that peak fill in the blank can be expected in coming years. There is also the aspect that as companies consolidate, free availability of their products can become better controlled. This could be for profit motives or to squeeze out portions of their customer base that isn’t “on board” with their plans.

More consolidation, more complexity and more specialization makes any system more and more difficult to maintain. Little things like this proposed takeover are symptoms of the overall trend toward utter unsustainability.

dooming up your day,

mike

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