The Canadian government has approved Bunge Ltd.'s $8.2-billion US acquisition of Viterra Ltd., but the Agriculture Producers Association of Saskatchewan (APAS) says more action is needed to address its concerns around industry competitiveness and sustainability.
The Competition Bureau said in a report last April to then-transport minister Pablo Rodriguez that the deal was likely to hurt competition in the grain and canola oil markets.
It also found that Bunge, the world's largest oilseed processing company, could influence the behaviour of G3 Global Holdings, a major competitor to Viterra.
Transport Canada says strict and legally binding controls are needed on U.S.-based Bunge's minority ownership stake in G3 to ensure it can't influence that company's pricing or investment decisions.
Among other terms and conditions are a commitment to retain Viterra's head office in Regina for at least five years and an investment of at least $520 million in Canada within the next five years.
APAS, NDP weigh in on deal
APAS said the effectiveness of the deal conditions will need to be monitored and evaluated over time to ensure they address the concerns of agriculture producers.
Bill Prybylski, president of APAS, said in a news release that it's imperative the conditions are "more than just words on paper."
"The decision does not directly tackle the projected $800-million financial loss to farmers or control over 45 per cent of Vancouver Port's capacity, opting instead for conditions like independent director nominations to mitigate anti-competitive risks," stated the release.
Prybylski said in an interview that he is also worried about some of the language in the deal in regards to the requirements of Bunge. He said while the corporation is committed to investing $520 million in Canada, there are no parameters as to when that will happen or where the money will go.
In an emailed statement, the Saskatchewan NDP also expressed concern over the merger, calling it "anti-competitive" and saying it "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."
Going forward, APAS encouraged stakeholders to provide feedback on the impacts of the deal.
Viterra, formerly the Saskatchewan Wheat Pool, is a grain-handling business that has more than 80 facilities across the country.
Viterra was acquired by Swiss commodities giant Glencore in 2012 for $6.1 billion. Glencore later sold a 40 per cent stake in the company to the CPP Investment Board and a nearly 10 per cent stake to the B.C. Investment Management Corp.
Source - https://www.msn.com
