Competition Bureau finds “substantial competition concerns” with Bunge’s proposed acquisition of Viterra

Canada’s Competition Bureau is raising “substantial competition concerns” with Bunge’s proposed acquisition of Viterra.

The US$8.1 billion deal announced in June 2023 would likely harm competition for canola grown near Bunge’s crush plants in Western Canada, and the supply of refined canola oil in Eastern Canada, according to a report published by the Bureau on April 22nd.

The report does not include any ruling, but will be used to inform Transport Canada’s broader review of the deal.

The competition watchdog also raised concerns about Bunge materially influencing the behaviour of Viterra’s competitor G3 Global Holdings, of which Bunge holds a 25 per cent ownership stake.

A primary concern raised in the report is the downward pressure the deal would have on canola prices in the areas around Bunge’s canola crush facilities in Nipawin, Sask., and Altona, Man. (pictured above)

“When considered over the volume of purchases in these areas, the aggregate impact of these price effects is likely to be $7-9 million in the Altona area and $8-10 million in the Nipawin area in lost farm revenues annually,” the Bureau says.

Of the 341 licensed grain elevators in Western Canada, the Bureau notes Viterra operates 65 while G3 has 19, representing approximately a quarter of the elevators and one third of elevator capacity in the west. Bunge also owns four of 11 canola crush facilities in Western Canada, while Viterra has one, with plans to build large crush facility in Regina, Sask.

The report says there is evidence that G3 and Viterra compete against each other around every one of G3’s 19 elevators in Western Canada.

“Through its significant interest in G3, Bunge will continue to have the ability to influence G3’s competitive strategy. If Bunge acquires the assets of G3’s largest competitor Viterra, Bunge will have a greater incentive to reduce G3’s competitiveness over time,” the report states.

The report was submitted to Transport Minister Pablo Rodriguez, as Transport Canada has until June 2 to complete its public interest review of the deal. The federal cabinet will then have to decide whether to allow or require modifications to the transaction, based on advice from the Transport Minister.

Responding to the Competition Bureau report, Bunge and Viterra say they believe the concerns are “misplaced” and that they look forward to working with Transport Canada and the Bureau to provide further information.

“We are pleased the regulatory process is advancing and are confident the transaction will yield considerable benefits to Canada,” the companies say.

Bunge and Viterra say they are still expecting the transaction will close in mid-2024, pending all regulatory approvals.

70 per cent of farmers who participated in a RealAgristudies survey last July said they believed the deal should not be allowed to proceed.


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

Survey says: Farmers reject the Viterra-Bunge merger

Wake up with RealAgriculture

Subscribe to our daily newsletters to keep you up-to-date with our latest coverage every morning.

Wake up with RealAgriculture