The official statement of the Grain Growers of Canada (GGC) states that they are extremely unhappy with the decision of Transport Minister Anita Anand to approve the acquisition of Viterra by Bunge Global SA. According to GGC, this decision will not ensure sufficient market competition protection for Canadian farmers.
GGC specifically noted that the terms of the deal proposed by the government do not include the sale of G3 company shares owned by Bunge. It is worth mentioning that G3 Global is 75% owned by the Saudi Agricultural and Livestock Investment Company (SALIC) and 25% by Bunge.
GGC emphasized that G3 Global Holdings is the main owner of G3 Canada Ltd., which operates 19 elevators in Western Canada and one in Quebec, as well as port terminals in Thunder Bay and Hamilton in Ontario, and in Quebec City and Trois-Rivières in Quebec. Viterra and G3 compete in the markets for crops such as canola, wheat, durum, barley, peas, corn, and soybeans across Western Canada.
While the conditions set by Transport Canada include the sale of six grain elevators in Western Canada and Bunge's investment commitments amounting to $520 million, GGC is convinced that these measures are insufficient to avoid negative impacts on market competition.
GGC Executive Director, Kyle Larkin, said: "Minister Anand's approval decision, even with the proposed conditions, does not address all of our concerns." Larkin underscored that the divestiture of six grain elevators is insufficient, considering that Bunge retains 25% of G3 shares, significantly reducing competition in the Prairies and Quebec. He also added that the proposed measures are inadequate to compensate for the expected annual costs of $770 million for Canadian farmers.
GGC highlighted that Canada's Competition Bureau and research conducted by the University of Saskatchewan have found that the acquisition without the sale of G3 would weaken competition in certain regions of the country, especially in the canola processing markets in Manitoba and Saskatchewan. According to the research, losses for grain farmers could amount to $770 million annually.
GGC expressed concerns about the concentration of the grain terminal market in the ports of Quebec and the potential implications of the merger for a new canola processing plant in Regina, Saskatchewan.
According to Larkin, this decision will directly impact the incomes of grain farms in Canada: "For example, an average grain farm in Manitoba could lose $10,000 in annual income. This decision exacerbates the challenging situation already faced by farmers due to rising production costs, falling commodity prices, and increased taxes."
The Canadian Ministry of Transport stated that the conditions imposed on the deal will address all concerns raised during the public assessment conducted under the Canada Transportation Act. In April 2024, Canada's Competition Bureau concluded that the proposed deal would "likely result in significant anti-competitive effects" and "substantial harm" to competition between Bunge and Viterra in Canada's agricultural markets. The bureau's report was then submitted to the Transport Minister for consideration.
Larkin stated: "This is a missed opportunity to protect competition in Canada's grain sector and prioritize the interests of food producers on which Canada and the whole world rely. We urge the government to review these conditions, take decisive action to promote competition, and support Canadian grain farmers."
Bunge announced the agreement to acquire Viterra in June 2023. Bunge agreed to buy Viterra, owned by Glencore PLC, for approximately $6.2 billion in Bunge shares and $2 billion in cash. Bunge also assumes $9.8 billion of Viterra's debt.
The deal closing negotiations were scheduled for mid-2024 but were delayed due to regulatory approval delays. Approval was received from Bunge shareholders in October 2023 and from the European Commission in August of this year. Approval from China is currently pending.