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BUNGE-VITERRA DEAL CONCERNS

Canada’s Competition Bureau on Tuesday said it had major concerns about U.S. grains merchant Bunge’s proposed acquisition of Glencore-backed Viterra, creating an obstacle for what would be a record large global agriculture merger in terms of dollar value. The deal would create a company worth $34 billion including debt, nearer in scale to rivals Archer-Daniels-Midland and Cargill. In a statement accompanying a formal report to Ottawa, the bureau said the deal was “likely to result in substantial anti-competitive effects and a significant loss of rivalry between Viterra and Bunge in agricultural markets in Canada.”

The agency determined the transaction was likely to harm competition for grain purchasing in Western Canada, as well as for selling canola oil in Eastern Canada. The bureau’s concerns could set the stage for the companies to sell some assets in order to close the deal. The two companies said in a joint statement that the bureau’s concerns were misplaced and vowed to work with Canadian authorities. Bunge CEO Greg Heckman said on Thursday Bunge had received approvals for the deal in 28 jurisdictions so far, with 13 remaining outstanding, including in the U.S., Canada, Brazil, China and the European Union. Heckman said it was unclear when the remaining regulatory approvals might come but added that he still expected the deal to close by midyear.

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