Glencore International PLC announced that Canada’s Minister of Industry on July 15 approved the company’s acquisition of Viterra Inc. under the Investment Canada Act. Glencore and Viterra signed a definitive agreement in March 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.
In granting his approval, Industry Minister Christian Paradis said in a statement that Glencore’s acquisition of Viterra is “likely to be of net benefit to Canada.”
“We are very pleased to receive Investment Canada approval, which recognizes the long term benefits for farmers and Canada from our acquisition of Viterra,” said Chris Mahoney, Glencore’s director of agricultural products. “Glencore is committed to investing in Viterra’s operations, its philanthropic initiatives, and in playing a key part in ensuring the continued growth of western Canada’s agricultural industry.”
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.
Viterra also issued a statement confirming the Minister of Industry’s approval, noting that this is the latest in a series of approvals and clearances necessary for the transaction to close. Viterra shareholders passed a resolution to approve the transaction at a special meeting on May 29, and Glencore reported in June that it had received unconditional approval from the Australian Competition and Consumer Commission. The Ontario Superior Court of Justice on May 31 also issued a final order approving the transaction under the Canadian Business Corporations Act, and the Canadian Competition Bureau earlier in May said it will not challenge the transaction. In addition, the U.S. statutory waiting period for antitrust review expired on May 3, and the European Commission issued a notice saying that it will not oppose the acquisition.
Viterra noted in its July 15 statement that the closing of the deal is still subject to approvals or clearances under the Australian Foreign Acquisitions and Takeovers Act of 1975, and the Chinese Anti-Monopoly Law.
Glencore reported on July 16 that it has received notification from the Ministry of Commerce of the People’s Republic of China (MOFCOM) that it has moved to the next phase of its review of the transaction. Glencore said it continues to engage with MOFCOM to ensure approval as soon as possible, but the company does not expect MOFCOM approval before the end of July.
Glencore said it will update the market “in due course when it expects closing of the Viterra transaction to occur.”