In a report to the federal transport minister, the Competition Bureau said the $8.2 billion U.S. purchase of Viterra by Bunge would ‘substantially’ reduce competition in grain and canola oil markets.
It also says Bunge could influence G3 Canada, a major competitor to Viterra. Bunge is a minority shareholder of G3 which has grain terminals across the Prairies.
The agreement, if approved by the Canadian government and other international regulators, would create a company that would be roughly on the same scale as Cargill and Archer-Daniels-Midland. (ADM)
The non-binding report has been sent to Transport Canada which has until June 2nd to assess the deal and provide its recommendations to the Transport Minister Pablo Rodriguez. The final decision will be made by the federal cabinet—but there is no set date on when a decision will be made.
Usually in larger mergers, the two companies will offer to sell some assets to third parties to reduce competition concerns. Bunge said in a statement that concerns about the merger are “misplaced” and the company looks forward to providing further information to Transport Canada.
The Agricultural Producers Association of Saskatchewan (APAS) says the Competition Bureau report supports its long-standing concerns with the proposed Bunge/Viterra merger.
APAS President Ian Boxall says reduced competition will “make it harder for grain producers to be successful with the possibility of fewer delivery options, lower prices and more one-sided, take-it-over-leave it grain contracts.”
Bunge and Viterra issued a joint news release saying it will address concerns about the proposed sale.
