THUNDER BAY — Two of the seven operating grain elevators in the Port of Thunder Bay are coming under new ownership.
The federal government has approved the merger of Viterra's Canadian assets, including a pair of grain elevators on Maureen Street, with global agri-business Bunge.
Last week's decision is not sitting well with some western Canada farm groups that had lobbied the government to require Bunge to sell its stake in G3 before approving the deal.
G3 is majority-owned by a Saudi investment company but Bunge has a 25 per cent stake in the firm, whose assets include grain elevators across the country including one on Darrel Avenue in Thunder Bay.
Conditions attached to Bunge's acquisition of Viterra include an agreement to maintain jobs at Viterra's head office in Regina, sell facilities in Manitoba and Saskatchewan, and keep its Canadian business separate from G3.
Grain Growers of Canada and the Agricultural Producers of Saskatchewan had lobbied the government to force Bunge to sell its stake in G3 to to maintain competition in the agricultural commodity sector.
The National Farmers Union said the deal essentially ends competition because Bunge will now control 40 per cent of the grain market, making it the biggest agricultural commodity trader in the world and putting farmers' profits at risk.
In approving the transaction, the government said it has attached extensive terms and conditions to protect competition and encourage investment in Canada.
"Farmers will have a wide range of competitive options when they sell their canola and other crops, as well as continue to receive fair prices for their produce," it stated.
The terms and conditions include:
- Bunge’s divestiture of six grain elevators in Western Canada to maintain competitive options for farmers in the region;
- Strict and legally binding controls on Bunge’s minority ownership stake in G3...to ensure Bunge cannot influence G3’s pricing or investment decisions;
- A price protection program for certain purchasers of canola oil in Central and Atlantic Canada to safeguard fair pricing and market stability;
- Retaining Viterra’s head office in Regina for at least five years to protect Canadian jobs;
- A binding commitment from Bunge to invest at least $520 million in Canada within the next five years, which will foster economic growth, productivity and job creation.
Bunge CEO Greg Heckman said last year that the new company "will be committed to Canadian workers and the transaction will not result in the closure of any Bunge or Viterra facilities in Canada."
In a submission to realagriculture.com, he wrote that G3 and the combined Bunge-Viterra will continue to be strong competitors, and that the new firm will provide Canadian producers with more certainty and economic security by increasing resilience to supply chain disruptions.
Bunge's acquisition of Viterra is expected to close early this year.
