Canadian farmers warn Bunge Viterra's takeover of Bunge will reduce competition

Farmers say that Canada's approval for Bunge's $34 billion takeover of Glencore's Viterra by U.S. grain traders Bunge will reduce their ability to sell crops at competitive rates and that the government has not made enough concessions. The approval of Canada with conditions, on Tuesday, was the last step needed to complete the largest global agriculture merger in dollar terms. Experts expected that asset sales would need to be made in a country with overlaps between the businesses of both companies. Canada's farmers, who are the top canola producers in the world and the No. The drought and low prices of commodities have been a problem for farmers in Canada, the world's No. 3 canola producer and no. Consolidation of grain traders could reduce farmers' ability to negotiate fair prices. Bill Prybylski, president of the Agricultural Producers Association of Saskatchewan, said that farmers will suffer. Farmers were concerned that Bunge's oilseed crushing plants combined with Viterra grain storage, shipping, and processing plants plus Bunge’s minority stake in G3 would limit competition. Anita Anand, the Transport Minister, set conditions for Bunge to receive approval. These included selling two oilseed crushing plants and six grain elevators in Western Canada, which are storage, transportation and processing facilities. Canada required that Bunge officials be replaced by independent directors on G3’s board. G3 is owned in part by Saudi Arabia SALIC. In a statement, Kyle Larkin said that Minister Anand's approval of the acquisition with conditions was not enough. These conditions are not enough to offset the $770,000,000 annual cost that this merger will incur for farmers.

Larkin stated that the merger would reduce competition in the Prairies as well as Quebec. Anand's Office did not respond immediately to a comment request.

The sale order of an oilseeds crushing plant, south of Winnipeg, and just north of U.S. Border, was welcomed by Jill Verwey of Keystone Agricultural Producers. She said that the sale of this oil seed crushing facility, located just south of Winnipeg, addressed one of Manitoba's largest farmers organizations main concerns. Bunge announced its proposed merger in 2023. In a statement released on Tuesday, the company stated that it expected to complete the merger by early next year. Separately, it said that approval by Chinese authorities was the last major step.

Viterra declined comment. The 2024 study, commissioned by farmer groups and conducted by agricultural economists, found that the merger would give G3 and the merged company 45% of the Vancouver port grain terminal's capacity. Canada's Competition Bureau dismissed these concerns. It said its analysis showed that port terminals primarily serve the needs of their owners and don't compete with other companies for export business. Ed White, Caroline Stauffer, and Rod Nickel edited the report.

(source: Reuters)