Canada clears $34 billion Bunge-Viterra merger with conditions

By Ismail Shakeel

OTTAWA (Reuters) – Canada on Tuesday approved conditional approval of U.S. grain trader Bunge’s $34 billion merger with Glencore-backed Viterra, clearing the last remaining hurdles to an unprecedented dollar-denominated global agricultural tie-up.

The approved conditions include Bunge building six grain elevators in Western Canada and Bunge’s binding commitment to invest at least C$520 million ($362 million) in Canada over the next five years, according to a Ministry of Transport statement.

The approval would require strict and legally binding control over G3, where Bunge’s minority stake is owned by Saudi Arabia, to ensure that Bunge cannot influence G3’s pricing or investment decisions, the ministry said. Bunge, Viterra and G3 combined account for one-third of Western Canada’s elevator capacity.

In the year The merger, which is expected to be announced in 2023, will create a global crop trading and processing giant with $34 billion in debt, closely related to archrivals Archer-Daniels-Midland Co and Cargill Inc.

“We are nearing completion of the regulatory process with Canadian approval and expect to close in early 2025,” Bung told Reuters in a statement.

The deal, which was approved by shareholders, will give the combined company an advantage over rivals from the expected demand for soybean and canola oil for biofuel production in the coming years. Crops.

Canada’s antitrust watchdog raised concerns about the deal in April, saying in a non-binding report that the transaction could hurt competition to buy grain in western Canada as well as to sell canola oil in eastern Canada.

The Ministry of Transport has created conditions to solve the problems raised during the public interest assessment during the procurement process.

Bunge CEO Greg Heckman said he doesn’t see the need for solutions in Canada.

To clear the deal, the Minister of Transport requested a price protection program for certain canola oil buyers in Central and Atlantic Canada to maintain fair prices and market stability.

Transport Minister Anita Anand said in a statement: “This decision shows the importance of increasing economic growth in Canada.

($1 = 1.4355 Canadian dollars)

(Reporting by Ismail Shakil in Ottawa and additional reporting by Tom Polanzek in Chicago; Editing by Chris Reese and Sonali Paul)