Glencore/Viterra deal wins Canadian nod

Ottawa — Canada’s Minister of Industry on July 15 approved Glencore International PLC’s acquisition of Viterra Inc. under the Investment Canada Act. Glencore and Viterra signed a definitive agreement in March (GM March 26, p. 1) whereby Glencore will acquire all of the issued and outstanding shares of Viterra for C$16.25 per share. The transaction values Viterra’s equity at approximately C$6.1 billion on a fully diluted basis. Glencore reported that it has made a series of commitments to Canada for a five-year period, including increasing Viterra’s projected capital expenditures in Canada by more than C$100 million; investing C$8 million above Viterra’s projected expenditures in R&D; contributing toward grain industry initiatives in the province of Manitoba; working with the Government of Saskatchewan toward establishing a Global Institute for Food Security in the province, and contributing to this initiative should the government initiate the project; increasing contributions toward programs supporting the Western Canadian farm community by 25 percent; and making charitable contributions in support of youth and educational scholarships for First Nations and Metis. Glencore has also committed to maintaining the Regina, Sask., head office and making it the head office for its North American agricultural operations. The Viterra acquisition also involves Agrium Inc. and Richardson International, a privately held grain trader and input retailer based in Winnipeg. Richardson has agreed to acquire more than C$900 million worth of Viterra’s grain handling assets, crop input and processing facilities, and related working capital. Agrium will acquire the majority of Viterra’s Agri-products business, including 232 of Viterra’s Canadian farm-supply outlets, 17 farm outlets in Australia, and a minority stake in the Canadian Fertilizers Ltd. plant at Medicine Hat, Alberta, for C$1.15 billion. Agrium said in June said the Canadian Competition Bureau will begin a 45-day review of Glencore’s deals with Agrium and Richardson as soon as Glencore’s acquisition of Viterra is complete. Agrium’s deal with Glencore is expected to close in the fourth quarter.