Monday, the federal government announced they had approved the purchase of Regina-based Viterra by Bunge Global, a global agribusiness and food company based in St. Louis, Missouri. The move, with a value of $34 billion, is considered to be unprecedented in the global agriculture markets and comes with a number of conditions.
The conditions include the divestiture of Bunge’s six grain elevators in Western Canada and a binding commitment to invest at least $520 mill within the next five years. Viterra's headquarters must remain in Regina, and strict and legally binding controls will be placed on Bunge’s minority stake in Saudi-owned G3.
While the move was approved by the government, it has been criticized extensively. In April, the Canadian Competition Bureau raised concerns about the deal, noting that it was likely to harm the competition for grain purchasing in Western Canada and the canola oil markets in Eastern Canada. The conditions of the sale did set up price protection for certain purchasers of canola oil.
"This decision underscores the importance of promoting economic growth in Canada while maintaining robust oversight to protect competition and the public interest," Transport Minister Anita Anand said in the statement.
The Agricultural Producers Association of Saskatchewan issued a statement about the merger, emphasizing that while some steps were taken in the final deal, industry competitiveness and sustainability still needed to be addressed.
"While we acknowledge the government's efforts in addressing the concerns raised by Saskatchewan farmers in its decision, it is essential that these conditions are more than just words on paper,” APAS President Bill Prybylski said in the written statement. “Farmers need real action that translates into enhanced competitiveness and sustainability in the grain industry."
Opposition NDP Leader Carla Beck, who was at the Crop Production Show in Saskatoon when the news broke, noted that not many producers at the event seemed happy with the news.
“Producers are simply left with the questions outstanding that they had going in when this merger was first raised,” Beck told Discover Weyburn. She also highlighted that many of the concerns originally raised by the Competition Bureau have yet to be addressed.
The Saskatchewan Wheat Development Commission also stated they were disappointed in the approval from the government for the purchase, with emphasis on the fact conditions didn’t address the grain-handling industry, with the carve-outs in the conditions seeming to only highlight canola oil.
“In a report completed by the University of Saskatchewan, it estimated that the merger would create significant financial losses for grain producers to the amount of $770 million annually,” said Sask Wheat board chair, and Fillmore area farmer, Jake Leguee. “With the lack of existing competition within the grain handling industry, further consolidation through this merger will only harm producers.”