Canada’s Competition Bureau announced on April 23 that it has concluded that the proposed $8.2 billion acquisition of Viterra Ltd. by Bunge Ltd. (GM June 16, 2023) is likely to result in “substantial anti-competitive effects” and a “significant loss of rivalry” between Viterra and Bunge in agricultural markets in Canada.
The Bureau’s concerns are outlined in a report submitted to the Minister of Transport. The report will inform Transport Canada’s public interest review of the proposed transaction as it relates to national transportation, which must be completed by June 2, 2024. The final decision regarding the proposed transaction will be made by the Governor in Council based on advice from the Minister of Transport.
The Bureau determined that the transaction is likely to harm competition in markets for grain purchasing in Western Canada, as well as for the sale of canola oil in Eastern Canada.
The Bureau also found that Bunge could materially influence the economic behavior of G3 Global Holdings, a major competitor to Viterra. As a 25% minority shareholder of G3, Bunge has access to G3’s confidential competitively sensitive information. If the deal is allowed to go through, Bunge will have an incentive to “influence G3’s economic behavior to the detriment of competition,” the agency said in its report.
Combining Bunge and Viterra would create a trader big enough to take on industry elites Minneapolis-based Cargill Inc. and Chicago’s Archer-Daniels-Midland Co. The deal is the culmination of Bunge CEO Greg Heckman’s transformation of the once-troubled St. Louis-based crop trader into a cash-rich oilseeds champion.
Bunge said in an April 23 statement that the “localized concerns” are “misplaced” and that the company “looks forward to working with Transport Canada and the Bureau to provide further information addressing these points.” The agribusiness company said it still expects the transaction to close in the middle of this year.