Viterra, formerly the Saskatchewan Wheat Pool, is a grain-handling business that has more than 80 facilities across the country.
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Published Jan 15, 2025 • Last updated 10 minutes ago • 5 minute read
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As part of the approval, Bunge will need to sell six grain elevators in Western Canada, as well as commit to investing at least $520 million in Canada within the next five years.Photo by John Locher/Associated Press files
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The conditions and terms attached to the federal approval of Bunge Ltd.’s US$8.2-billion acquisition of Viterra Ltd. are “woefully inadequate” to address the profound impact on the market, Grain Growers of Canada’s executive director says.
Bunge Ltd., one of the world’s largest crop traders, received approval Tuesday from the Canadian government for its acquisition of Viterra. The decision came after delays to regulatory approvals around the world pushed back the completion of the deal, previously set for the middle of 2024.
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Viterra, formerly the Saskatchewan Wheat Pool, is a grain-handling business with more than 80 facilities across the country.
“This is a missed opportunity to protect competition in Canada’s grain sector and prioritize the interests of producers who grow the food that Canada and the world rely on,” Grain Growers of Canada (GGC) executive director Kyle Larkin said on Wednesday.
The Canadian government in a statement insisted the decision is “firmly rooted in Canada’s public interest” and comes with “extensive terms and conditions to protect competition, encourage investment in Canada and secure economic benefits” for Canadians.
The nod by Canada comes with conditions, including some asset sales; Bunge will be required to sell six grain elevators in Western Canada. Among other terms and conditions are a commitment to retain Viterra’s head office in Regina for at least five years and an investment of at least $520 million in Canada within the next five years.
Larkin called on the federal government to revisit the conditions, strengthen measures to foster competition, and “take meaningful steps to support Canada’s grain farmers.”
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The terms and conditions are in place to “help ensure that the acquisition will not have a negative impact on competition in Canada’s grain and oilseed sector, notably for grain purchasing in Western Canada and the sale of canola oil in Central and Atlantic Canada. Farmers will have a wide range of competitive options when they sell their canola and other crops, as well as continue to receive fair prices for their produce,” the federal government said.
“This decision underscores the importance of promoting economic growth in Canada, while maintaining robust oversight to protect competition and the public interest,” Transports and Internal Trade Minister Anita Anand said.
Transport Canada says strict and legally binding controls are needed on U.S.-based Bunge’s minority ownership stake in G3 Global Holdings to ensure it can’t influence that company’s pricing or investment decisions. G3 is a joint venture between the U.S. crop giant and the Saudi Agricultural and Livestock Investment Co.
“Minister Anand’s decision to approve the acquisition, even with conditions, doesn’t go nearly far enough,” Larkin said.
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“The divestment of six grain elevators is a token gesture in the face of a company that maintains a 25 per cent stake in G3, greatly reducing competition across the Prairies and in Quebec.”
GGC noted that the Competition Bureau, an independent law enforcement agency in place for businesses and consumers, as well as University of Saskatchewan researchers, found that an acquisition without divesting G3 would weaken competition across the country, notably in Manitoba and Saskatchewan canola crushing markets. The university report calculated an annual loss of $770 million in revenues for grain farmers.
“This decision is a direct hit to producers’ revenue,” Larkin said. “This decision compounds an already difficult landscape, as farmers continue to face rising input costs, falling commodity prices, and increased taxes.”
The Competition Bureau said in a report last April to then-transport minister Pablo Rodriguez that the deal was likely to hurt competition in the grain and canola oil markets. Canada’s antitrust watchdog has said the acquisition will have “substantial anti-competitive effects” on the agricultural markets.
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It also found that Bunge, the world’s largest oilseed processing company and one of the largest crop traders, could influence the behaviour of G3 Global Holdings, a major competitor to Viterra.
GGC also raised concerns over a market concentration of grain terminals at ports in Quebec and the implications on an announced canola crushing facility in Regina.
Saskatchewan NDP Leader Carla Beck said her party has felt from “day one that this deal is bad for Saskatchewan.
“This large consolidation puts head office jobs, agriculture and value-added jobs across Saskatchewan and canola crush projects all at risk, and our world-class producers are going to take a hit on their incomes,” Beck said on Wednesday.
“The federal and provincial governments should not have rolled over and let this anti-competitive merger go through. They should have stood up for Saskatchewan, instead of selling it out.”
The provincial government did not respond before deadline to a request for comment.
In an opinion piece written last year, Bunge chief executive officer Greg Heckman said the deal would not result in the closure of any facilities in the country. He also stressed that he disagreed with findings of a report that flagged concerns about Bunge’s stake in G3.
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“This is an important milestone in the process to complete the Bunge-Viterra transaction,” Bunge said in a statement.
“With the Canadian approval, we are nearing completion of the regulatory process and expect to close in early 2025.”
Bunge is still awaiting approval from China.
Viterra was acquired by Swiss commodities giant Glencore in 2012 for $6.1 billion. Glencore later sold a 40 per cent stake in the company to the CPP Investment Board and a nearly 10 per cent stake to the B.C. Investment Management Corp.
— With files from Canadian Press and Bloomberg
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