Review of US$8.2-billion agriculture merger between Viterra and Bunge draws opposition from Competition Bureau

A Viterra grain elevator outside of Indus, Alta. on April 23. Canada’s Competition Bureau has come out against the proposed US$8.2-billion merger between the agriculture division of Glencore PLC, which includes Viterra, and Bunge Ltd., citing 'substantial anti-competitive effects' in Canada.

Glencore has a 49.9-per-cent stake in Viterra after selling large positions to pension funds Canada Pension Plan Investment Board and British Columbia Investment Management Corp. in 2016 because it needed to repay debt.and is supporting the sale. CPPIB will receive a 12-per-cent stake in the combined company as well as US$800-million in cash.

However, the bureau said in its report that the deal would combine “the company with the most oilseed crushing facilities and the company with the most primary grain elevators in Western Canada.” As for G3, which was created in 2015 to develop new grain handling and export infrastructure in Canada, the Competition Bureau noted its parent company is joint-owned by Saudi Agricultural and Livestock Investment Co. and Bunge. If the Viterra deal is completed, Bunge will be able to materially influence G3 because of access to confidential information, the bureau said.

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