A Bunge-Viterra merger would require Competition Bureau review

While the Competition Bureau won’t speculate or comment on a hypothetical transaction, such as the purchase of grain company Viterra by grain giant Bunge, it’s hard to imagine a scenario where the Bureau would not eventually be involved in ruling on the deal.

Under the Competition Act, transactions of all sizes are subject to review by the Bureau. In general, the Bureau must be given advance notice of proposed transactions when the target’s assets in Canada or revenues from sales in or from Canada generated from those assets exceed $93 million, and when the combined Canadian assets or revenues of the parties and their respective affiliates in, from or into Canada exceed $400 million, the Bureau says.

In the case of a potential sale of Viterra to Bunge, it’s important to note that Bunge already has a stake in another Canadian grain company — G3 Canada Limited.

G3, which was spun out of the Canadian Wheat Board, is owned by a joint venture between Bunge Canada Ltd. and Saudi Agricultural and Livestock Investment Company (SALIC) Canada and the Farmers Equity Plan.

In addition to grain elevators operating in the same markets, Bunge and Viterra also compete for farmers’ canola at processing facilities in Western Canada.

Viterra, whose Canadian business originates in the Saskatchewan Wheat Pool, was bought by Glencore in 2012 for $6.1 billion. Glencore adopted the Viterra name for its global agriculture business in 2020, which encompasses 37 countries, employs over 16,000 people and trades more than 70 million tonnes of agricultural commodities annually.

All told, a deal by Bunge to buy Viterra in Canada would be a very large one indeed, and would have to pass the Bureau’s requirements to move forward.

“Should we determine that a proposed transaction is likely to harm competition, we will take appropriate action,” the Bureau writes in an email to RealAgriculture.

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