Competition Bureau Won't Challenge Glencore Deal
Written by Glenda Lee Allan
Monday, 07 May 2012
Canada's Competition Bureau won't challenge Glencore’s proposed takeover of Viterra under the Competition Act.
The letter means the bureau won't challenge the proposed deal but has yet to decide on other aspects of the proposal which would see Glencore sell some of Viterra's holding to Agrium and Richardson International.
"I firmly believe we're the right company to run this business," said Chris Mahoney, Glencore's Director of Agricultural Products, while he visited Regina last month. "I think we will be very good custodians of the assets, we're very farmer-focused, we have the financial wherewithal and the willingness to not only deploy working capital to buy the crop, but also to maintain, upgrade, and expand the asset base."
Meanwhile, the President of the National Farmers Union is not surprised to hear this news. Terry Boehm says the Competition Bureau has rarely intervened in any of the massive consolidations we’ve seen take place, but says it’s worrisome that a Canadian-based company becomes part of an international entity, and its assets are split off.
"The very assets that farmers built up through its cooperative structures and lost with the demise of the [Saskatchewan Wheat Pool], all of these assets are actually now being bought up by massive international players, and then rather than being a benefit for them, they're being used against them, ultimately." Boehm added.
The deal still needs the approval of shareholders and the Canadian government because it is a foreign takeover.