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News 699 views last update:6 Aug 2012

Glencore to acquire Canada's Viterra

Swiss-based commodities firm Glencore International agreed this week to buy Canada's largest grain handling company Viterra, in a deal valued at Cdn$6.1 billion (€4.6 billion).

Glencore will immediately sell the majority of Viterra's Canadian assets and certain other businesses to Canadian-based companies Agrium and Richardson International for about Cdn$2.6 billion (€1.96 billion) in cash, it said.
 
Winnipeg-based Richardson International is to acquire grain handling, crop input and processing facilities and related working capital.
 
Agrium acquired roughly 90% of Viterra's Canadian retail facilities, which is a bit of concern in terms of concentration of ownership.
 
Glencore said it will buy all shares of Viterra for Cdn$16.25 per share in cash, a premium of about 50 per cent over its trading value before the first word of a possible deal emerged March 8.
 
"The acquisition of Viterra is consistent with Glencore's strategy of strengthening its position as one of the global leaders in grain and oilseeds markets," said the company based in Baar, Switzerland.
 
Glencore is already one of the world's biggest traders in raw materials, such as coal, cotton and corn.
 
Canadian authorities will examine whether the takeover of Viterra is a "net benefit" to Canada. They have previously blocked Glencore rival BHP Billiton's takeover of Potash Corp because of concerns.
 
Industry participants see the purchase as a generally positive development for agriculture in Canada, but concerns about reduced competition have been raised.

Dick Ziggers

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