Glencore to acquire Viterra; Agrium and Richardson agree to purchase certain Viterra assets
Glencore International PLC and Viterra Inc. announced on March 20 that they have signed a definitive agreement in which Glencore has agreed to 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. The transaction will be funded out of Glencore’s existing cash resources and available credit facilities.
As noted in earlier reports, the deal also involves Agrium Inc. and Richardson International, a privately held grain trader and input retailer based in Winnipeg. Agrium reported that it has entered into a definitive agreement with Glencore to acquire the majority of Viterra’s Agri-products business, and Richardson announced that it 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.
“The acquisition of Viterra reflects our strong belief in the importance and future potential of the Canadian and Australian grain markets,” said Chris Mahoney, director of Agricultural Products for Glencore. “This is an exciting opportunity to deliver the real benefits that can be generated through the combination of Glencore’s and Viterra’s respective assets, people and know-how to both farmers and customers in Canada, Australia and further afield.”
"Viterra employees created a worldclass agri-business, of which I am very proud,” said Mayo Schmidt, Viterra’s president and CEO. “This has been recognized by Glencore and its partners, and this transaction creates value and opportunities for employees, our communities, farmers and customers in all the markets we serve.”
In a statement, Glencore said the acquisition is consistent with its strategy of strengthening its position as one of the global leaders in grain and oilseeds markets.
“Viterra’s Tier 1 portfolio of assets in Canada and Australia will allow Glencore to build upon its position as one of the world’s largest commodity suppliers and provides the opportunity to leverage Glencore’s extensive global networks, expertise and best practices in order to create additional value across its agricultural businesses,” Glencore said.
Under the agreement, Agrium will acquire approximately 90 percent of Viterra’s Canadian retail facilities, all of its Australian retail facilities, as well as their minority position in a nitrogen facility located in Medicine Hat, Alberta. Agrium valued the acquisition price from Glencore at approximately C$1.15 billion, plus working capital, in a back-to-back purchase and sale arrangement.
Richardson will acquire 23 percent of Viterra’s Canadian grain handling assets, certain agri-centers, and certain processing assets in North America for C$0.8 billion in cash, subject to specified purchase price adjustments, including payment for working capital. The assets to be acquired by Richardson include 19 country elevators and the crop input centers co-located with those elevators, which Richardson said will complement its Pioneer network of grain elevators and crop input centers across Western Canada.
Richardson’s agreement with Glencore includes the purchase of a 25 percent ownership interest in Cascadia Terminal (Vancouver); a Viterra terminal in Thunder Bay, Ontario; the Can-Oat Milling business, with oat processing plants in Portage la Prairie, Manitoba, Martensville, Sask., and Barrhead, Alberta; and 21st Century Grain Processing, which has an oat processing plant in South Sioux City, Neb., and a wheat mill in Dawn, Texas.
Glencore noted that the purchase of Viterra is not conditional on Glencore’s agreements with Agrium or Richardson being completed.
"We believe our Crop Production Services Retail business can provide