It’s likely that Bunge Ltd.’s US$8.2-billion deal to acquire Viterra Ltd. would “substantially” reduce competition in the grain and canola oil markets, the Competition Bureau says.
In a report to Transport Minister Pablo Rodriguez released Tuesday, the bureau said the deal is likely to hurt competition in markets for grain purchasing in Western Canada as well as for the sale of canola oil in Eastern Canada.
The bureau also found that Bunge could influence the behaviour of G3 Global Holdings, a major competitor to Viterra. Bunge is a minority shareholder of G3, which operates grain elevators in many of the same regions as Viterra.
“The proposed transaction is likely to result in substantial anti-competitive effects in agricultural markets in Canada,” the bureau found.
U.S.-based Bunge announced a deal last year to buy Viterra for US$8.2 billion in cash and shares.
The two companies said in a news release that the noted concerns are “misplaced” and they look forward to working with Transport Canada and the bureau to provide further information addressing the concerns.
The companies said they’re pleased the regulatory process is advancing and are confident the transaction will yield considerable benefits to Canada.
Transport Canada has until June 2 to complete a public interest assessment and provide it to the minister.
The final decision regarding the proposed transaction will be made by the federal cabinet, based on advice from the transport minister.
Bunge is the world’s largest oilseed processing company, operating 300 facilities in more than 40 countries worldwide with about 23,000 employees. Viterra, owned by Swiss commodities giant Glencore, as well as the Canada Pension Plan Investment Board and B.C. Investment Management Corp., operates in 37 countries with more than 16,000 employees.
Viterra, formerly the iconic Saskatchewan Wheat Pool, is a grain-handling business that has more than 80 facilities across the country.
The merger is part of an ongoing wave of consolidation in the agriculture sector in recent years. Among notable mergers have been German company Bayer’s 2018 US$66-billion blockbuster deal to acquire Monsanto, as well as the 2018 merger between Agrium Inc. and PotashCorp of Saskatchewan, which created Nutrien Inc., the largest potash producer in the world.
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