Transport Canada to review proposed Bunge-Viterra deal

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Canada’s transport minister says Bunge’s US$8.1 billion deal to acquire Viterra will face additional scrutiny to ensure fair competition at Canadian ports.

In addition to the ongoing review by Canada’s Competition Bureau, Transport Minister Pablo Rodriguez announced the proposed acquisition will be subject to a public interest assessment under the federal Transportation Act.

“Given this transaction is of significant national interest in Canada’s transportation sector and the broader supply chain, it will be reviewed under the mergers and acquisitions provisions of the Canada Transportation Act,” Rodriguez said, in a statement released Tuesday. “Goods must continue to move smoothly, and our supply chain must continue to grow stronger.”

Transport Canada has a deadline of June 2, 2024 — or 250 days — to complete the review.

“Strengthening the transportation supply chain is one of the ways the Government of Canada can help make life more affordable for Canadians. Our government will continue to work to bring relief to consumers and to support Canadian workers and farmers,” said Rodriguez. “This assessment will help ensure that our transportation system is strong and competitive for generations to come.”

Seventy-nine percent of farmers who responded to a RealAgristudies survey in July said they were concerned about the consolidation of the two grain companies. Around 70 per cent said they don’t think it should be allowed to proceed.

As with the Competition Bureau review, it’s not clear how Bunge’s minority stake in G3 Global Grain Group will be viewed by transport regulators.

Viterra operates six grain-handling port facilities across Canada, including the Cascadia and Pacific Terminals at the Port of Vancouver, Prince Rupert Grain, two terminals in Thunder Bay, and one in Montreal.

Meanwhile, G3 opened a new high capacity port terminal in Vancouver in 2020, and also operates port facilities in Thunder Bay, Hamilton, Trois-Rivieres, and Quebec City — some of which were operated by Bunge prior to the formation of G3 and the purchase of the former Canadian Wheat Board in a joint venture with the Saudi Agricultural and Livestock Investment Company (SALIC) in 2015.

(It’s believed SALIC now holds a 75 per cent ownership stake in the joint venture with Bunge that owns a controlling interest in G3, with Bunge owning the remaining 25 per cent. The Farmers Equity Trust created with the privatization of the Canadian Wheat Board still owns a minority stake in the overall company.)

In the airline industry, WestJet’s acquisition of Sunwing Airlines went through the same Transportation Act review process last year and was ultimately approved.

The Viterra acquisition is expected to require regulatory clearance in at least 29 countries, according to documents filed by Bunge with the U.S. Securities and Exchange Commission.

Bunge is planning to have transaction close by mid-2024.

Related:

Bunge expected to downplay stake in G3, as questions surround merger with Viterra

Bunge-Viterra deal expected to require clearance in at least 29 countries

Survey says: Farmers reject the Viterra-Bunge merger

Editor’s note: This story was updated to clarify G3’s ownership structure, and that the Farmers Equity Trust still owns a minority stake in the grain company.

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