The federal government has approved Bunge’s acquisition of Viterra, with conditions attached.
The conditions, Transport Canada says in a news release published on Tuesday, are meant to “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.”
Conditions include Bunge’s divestiture of six grain elevators in Western Canada to maintain competitive options for farmers in the region, as well as legally binding controls on Bunge’s minority ownership in G3 Canada so Bunge can’t influence G3’s pricing or investment decisions.
Other conditions include retaining Viterra’s head office in Regina for at least five years and investing at least $520 million in Canada within the next five years, and a price protection program for certain buyers of canola oil in Central and Atlantic Canada to protect fair pricing and market stability.
There are 20 other conditions that can be found online on the Order in Council online database.
“This decision underscores the importance of promoting economic growth in Canada, while maintaining robust oversight to protect competition and the public interest. We are committed to supporting a strong economy, including in the agricultural, and transportation sectors.” said Anita Anand, Minister of Transport and Internal Trade.
Initial Reaction
The Agricultural Producers Association of Saskatchewan (APAS) weighed in on the approval of the Bunge-Viterra merger.
APAS said while the decision seems to “partially address farmer’s original concerns about potential negative impacts of
the merger…the effectiveness of the imposed measures will need to be evaluated over time to ensure they address the concerns.”
President of APAS Bill Prybylski is cautiously optimistic about the merger, saying, “while we acknowledge the government’s efforts in addressing the concerns raised by Saskatchewan farmers in its decision, it is essential that these conditions are more than just words on paper. Farmers need real action that translate into enhanced competitiveness and sustainability in the grain industry.”
APAS says a few things were omitted from the merger decision, such as a projected “$800 million financial loss to farmers or control over
45% of Vancouver Port’s capacity opting instead for conditions like independent director nominations to mitigate anti-competitive risks” and “Bunge’s involvement in the Regina canola crush project…focusing [instead] on general competition and operational measures.”
The farm group acknowledged the strategies implemented will “increase competition in the canola sector and limiting Bunge’s grain operations in G3 indirectly “safeguards farmers against fluctuating margins, high input costs, and ensure a competitive, transparent supply chain.”
APAS wants all stakeholders to stay engaged in the process and “provide feedback on the practical impacts of these policy changes as they unfold.”
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