The recent increase in agriculture related M&A activity is a sign that investors are beginning to see the value in agriculture. With all asset prices depressed, investors will seek opportunities in asset classes where the fundamentals are not impaired, such as agriculture. 

Yesterday Canadian fertilizer and specialty agriculture producer Agrium made a $3.6 billion, $72 a share offer to buy U.S. rival CF Industries. The combined entity will have revenue of roughly $14 billion and will be a leader in nutrient production and distribution.

In January, CF Industries announced an offer to acquire Terra Industries for $2.1 billion. Agrium's offer is conditioned on CF dropping its offer for Terra.

Agrium President and CEO Mike Wilson commented that the proposed transaction will "continue to build on our position as the leading North American agricultural retailer, further expand our potash capacity and advanced technologies business or pursue other strategic opportunities."

Keep your eyes and ears open as we expect to see more M&A news in the near future and remember that "even in a downturn, people need to eat."

- Colvin