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Why Is Agrium (AGU) Merging?
Sribatsa Das, MBA
Co-Creator – Altman Z-Score+ Corporate Credit Risk App &
Founder of Business Compass LLC



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Agrium is a large Canadian diverse agro-business company that manufacturers and markets major agricultural nutrients, specialty fertilizers, seeds and pesticides across the world. Recently, merger between Agrium and Potash was announced. Both the companies are healthy financially. The merger seems to be arising from achieving scale and scope as well as efficiency from common products. Most importantly, Potash wants to reduce volatility to its revenue stream by tapping into more stable diversified product-base of Agrium. This article analyzes Agrium from Altman Z-Score perspective. Both Z-Score analysis and interest coverage trend indicate strength in Agrium’s financial health

Z-Score and Z”-Score trends for Agrium over time indicate that from a corporate risk point of view the company has remained in the “Gray Zone” over the years.


Agrium’s interest coverage ratio indicates strength in its ability to service debt.





In conclusion, bankruptcy risk of Agrium is in the “Gray Zone” and interest coverage ratio indicates strong ability to service debt although it has been falling in recent years.

Altman Z-Score+ is available on web, desktop, mobile, wearable and on Bloomberg Terminal. This product is available on Bloomberg Terminal via APPS ALTMAN.
For more information about Altman Z-Score Corporate Default risk, visit http://www.altmanzscoreplus.com or contact zscore@businesscompassllc.com.

Disclaimer:

1. The author does not own Agrium securities.
2. This article is not a recommendation on the company security.