The federal government has approved a major agricultural business deal involving Regina-based Viterra.
Bunge Ltd.’s $8.2 billion acquisition of Viterra has been in the works for some time, raising competition concerns in 2024.
At the time, Canada’s Competition Bureau said the deal was “likely to result in substantial anti-competitive effects and a significant loss of rivalry in a number of grain and canola oil markets across Canada.”
In a release outlining the deal’s approval Tuesday evening, the federal government said the deal does come with several terms and conditions to quell competition concerns and “encourage investment in Canada and secure economic benefits for Canadians.”
“The terms and conditions 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,” the release said. “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 terms include Bunge’s selloff of six grain elevators in western Canada, strict and legally binding controls on Bunge’s stake in G3 and a price protection program for certain purchasers of canola oil.
Additional terms include a commitment for Bunge to invest at least $520 million in Canada over the next five years and retain Viterra’s head office in Regina for at least five years. A full list of terms is available on the Orders 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,” said Transport and Internal Trade Minister Anita Anand in the release.
“We are committed to supporting a strong economy, including in the agricultural, and transportation sectors.”
However, the merger has had its fair share of criticism.
Among the dissenters are the Agricultural Producers Association of Saskatchewan (APAS) and the Saskatchewan NDP.
APAS President Bill Prybylski says some concerns voiced by producers have been acknowledged while others have not.
They range from issues arising from Bunge now controlling 45 per cent of capacity at the Port of Vancouver to large capital investments promised by Viterra potentially being abandoned.
“We see that there is commitment to make some investments – the $520 million that they’ve committed to – that’s going to help. No commitment, from what I’ve seen, with the crush plant in Regina that was originally slated for Viterra to open in the coming years, so that’s a concern,” he said.
“We’ll have to wait and see what and where they’ll make those investments.”
Prybylski went on to say that many producers with limited elevator options in their area are already in precarious positions.
“As producers, we’re limited on our delivery opportunities, we’re not going to truck our grain halfway across the country to just get a couple extra bucks,” he explained.
“There are certainly areas where Viterra may have been our only option or maybe one of only a few. In those areas, it’s going to make a significant difference to producers in terms of what they’re able to sell their grain for.”
Saskatchewan NDP Carla Beck largely echoed the concerns of APAS, describing the merger as a “bad deal 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 in a statement.
“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.”
In a statement sent to CTV News Wednesday morning, a company spokesperson said that both Viterra and Bunge are pleased with the federal approval – and reiterated that the merger is expected to be completed in early 2025.
“We appreciate the constructive dialog with Canadian government officials as part of a thorough regulatory review process,” the statement read.
“This is an important milestone in the process to complete the Bunge/Viterra transaction which will enhance our ability to provide sustainable solutions and serve our food, feed and fuel customers at both ends of the value chain – farmers and end consumers.”
The merger is set to create a global crop trading and processing entity worth approximately $34 billion, including debt.
The size of the new venture would be closer in scale with competitors such as Archer-Daniels-Midland and Cargill Inc.
The timing of the announcement was applauded by the Government of Saskatchewan, noting that the producers as well as the two companies need certainty ahead of the 2025 growing season.
“The Government of Saskatchewan is currently evaluating the over 20 terms and conditions attached to the federal government ruling to help prevent negative impacts on competition in Canada’s grain and oilseed sector,” the statement read.
“Our priority is ensuring Saskatchewan producers continue to be competitive with access to key global markets.”
Bunge Ltd. is a global agribusiness and food company headquartered in St. Louis, Missouri. Originally incorporated in Switzerland, the company boasts 23,000 employees across 300 facilities in 40 countries.
Viterra is an international agribusiness that was formed in 2007 when the Saskatchewan Wheat Pool merged with Agricore United. Headquartered in Regina, the company of 16,000 employees handles and markets grain, along with other agricultural products across 37 countries.
With files from Donovan Maess
