Agrium announces agreement with Royster-Clark on rights plan and regulatory matters

Release Date: 12/16/2005

CALGARY, Alberta -- Agrium Inc. (TSX and NYSE: AGU) announced today it has reached an agreement with Royster-Clark Ltd. on certain matters relating to Agrium's offer to purchase all outstanding Royster-Clark Income Depositary Securities (IDSs) for $10.00 (Canadian) cash per IDS.

Royster-Clark has agreed to withdraw its application before the Ontario Securities Commission alleging certain deficiencies with respect to the Agrium offer.  Agrium and Royster-Clark have agreed that Agrium will extend the expiry time of its bid until midnight (Vancouver time) on January 12, 2006 and Royster-Clark will waive the application of its rights plan to Agrium’s bid at that time.  As a result, Agrium will also withdraw its application before the Commission concerning Royster-Clark's rights plan.

“I am pleased that we were able to come to an agreement with Royster-Clark on these outstanding issues,” said Mike Wilson, Agrium President and CEO.  “As a result of the constructive manner in which this agreement has been reached Royster-Clark unitholders will be able to give our cash offer full consideration.”

Agrium will file and deliver a formal notice of extension of its offer by early next week.

Agrium Inc. is a leading global producer and marketer of agricultural nutrients and industrial products and a major retail supplier of agricultural products and services in both North and South America.  Agrium produces and markets three primary groups of nutrients: nitrogen, phosphate and potash as well as controlled release fertilizers and micronutrients. Agrium’s strategy is to grow through incremental expansion of its existing operations and acquisitions as well as the development, commercialization and marketing of new products and international opportunities.

This press release contains forward-looking statements.  Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.  Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.  These risk factors relative to this bid, include: realization of operational synergies, reliance on Royster-Clark Ltd.’s publicly available information which may not fully identify all risks related to their performance, success in integrating the retail distribution systems, and the integration of supply chain management processes, as well as other risk factors listed from time to time in Agrium’s reports, comprehensive public disclosure documents including the Annual Information Form, and in other filings with securities commissions in Canada (on SEDAR at www.sedar.com) and the United States (on EDGAR at www.sec.gov).

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