Canada clears $34 billion Bunge-Viterra merger with conditions

By Ismail Shakil

OTTAWA (Reuters) -Canada on Tuesday approved with conditions U.S. grains merchant Bunge (NYSE:BG)’s $34 billion merger with Glencore-backed Viterra, clearing one of the final remaining obstacles for a global agriculture tie-up that is unprecedented in dollar value.

The conditions for the approval include Bunge’s divestiture of six grain elevators in Western Canada and a binding commitment from Bunge to invest at least C$520 million ($362 million) in Canada within the next five years, according to a statement from the transport ministry.

The approval also requires strict and legally binding controls on Bunge’s minority stake in Saudi-owned grain company G3 to ensure Bunge cannot influence G3’s pricing or investment decisions, the ministry said. Bunge, Viterra and G3 account for a combined one-third of Western Canada’s elevator capacity.

The merger, announced in 2023, would create a global crops trading and processing giant worth $34 billion including debt, closer in scale with chief rivals Archer-Daniels-Midland Co and Cargill Inc.

“With the Canadian approval, we are nearing completion of the regulatory process and expect to close in early 2025,” Bunge said in a statement to Reuters.

The deal, approved by shareholders, would make the combined company better able to capitalize on an anticipated surge in demand for soybean and canola oil to produce biofuels in coming years than its rivals, but more consolidation in the industry leaves farmers with fewer buyers for their crops.

Canada’s antitrust watchdog flagged concerns around the deal in April, saying in a non-binding report that the transaction was likely to harm competition for grain purchasing in Western Canada, as well as for selling canola oil in Eastern Canada.

The transport ministry said its conditions address the concerns raised during the public interest assessment of the acquisition.

Bunge CEO Greg Heckman had said that he did not see the need for remedies in Canada.

In clearing the deal, the transport minister has required the setting up of a price protection program for certain purchasers of canola oil in Central and Atlantic Canada to safeguard fair pricing and market stability.

“This decision underscores the importance of promoting economic growth in Canada, while maintaining robust oversight to protect competition and the public interest,” Transport Minister Anita Anand said in the statement.

($1 = 1.4355 Canadian dollars)