Global agriculture firms Bunge and Viterra have officially merged. The companies confirmed the completion of their $34 billion USD ($46.2 billion CDN) deal on Wednesday."Today is a defining moment for our company," stated Bunge Chief Executive Officer Greg Heckman. "Together we’ve formed a stronger organization with enhanced capabilities and expertise." Heckman pointed out the enhanced capabilities and expertise from the merger.First announced in June 2023, the merger faced significant regulatory issues..China gave its approval in mid-June this year. This was the final hurdle needed. Canada had approved the deal on January 14, but attached strict conditions.These conditions require Bunge to sell six grain elevators in Western Canada. Bunge must also invest at least $520 million in Canada within five years. Rules also affect Bunge's minority stake in grain handler G3..The merger creates a grain powerhouse rivalling Cargill and Archer Daniels Midland (ADM). This size has sparked worries about reduced competition hurting Canadian farmers.A study commissioned by the Agricultural Producers Association of Saskatchewan predicted serious impacts. Conducted by the University of Saskatchewan, it suggested the merger could raise export costs by 15%. It also forecast a 10% increase in processing margins. The study concluded this could mean a $770 million net annual loss for farmers..Heckman disputed these findings in an opinion piece. He argued the study relied on false assumptions and incomplete data. Specifically, he rejected the idea the merged company would operate G3 and Viterra export facilities as one unit. Bunge called this "objectively false."Canada's Competition Bureau (CB) also flagged concerns. It reported 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 CB warned of a significant loss of rivalry in Canadian agricultural markets. It believed competition could suffer in Western Canadian grain buying and Eastern Canadian canola oil sales. Bunge and Viterra challenged these conclusions.With the merger finalized, Bunge stated the new company is positioned to link major farming regions to high demand consumption areas. It expects better geographic balance, access to more markets, and a diversified crop network. The combined company also anticipates more stable finances and improved risk profiles..Under the deal terms, Swiss-based Glencore (Viterra's backer) received 32.8 million Bunge shares. This represents 16.4% of the enlarged company. Glencore also received about $900 million USD in cash. Final adjustments to this payment are possible.Sask NDP opposition expressed disappointment.."We have raised major concerns about the Bunge-Viterra merger from the start," said Aleana Young, Sask NDP Jobs and Economy Critic. “Those concerns came to us directly from producers, who are reported to lose $770 million in annual revenue and faced reduced competition. We remain concerned about the possible loss of hundreds of head office jobs in Regina. We know the company disputes the findings of that report.”Young criticized the provincial government for being "missing in action." She vowed the Sask NDP would watch closely, demanding Saskatchewan jobs and the economy remain the priority.
Global agriculture firms Bunge and Viterra have officially merged. The companies confirmed the completion of their $34 billion USD ($46.2 billion CDN) deal on Wednesday."Today is a defining moment for our company," stated Bunge Chief Executive Officer Greg Heckman. "Together we’ve formed a stronger organization with enhanced capabilities and expertise." Heckman pointed out the enhanced capabilities and expertise from the merger.First announced in June 2023, the merger faced significant regulatory issues..China gave its approval in mid-June this year. This was the final hurdle needed. Canada had approved the deal on January 14, but attached strict conditions.These conditions require Bunge to sell six grain elevators in Western Canada. Bunge must also invest at least $520 million in Canada within five years. Rules also affect Bunge's minority stake in grain handler G3..The merger creates a grain powerhouse rivalling Cargill and Archer Daniels Midland (ADM). This size has sparked worries about reduced competition hurting Canadian farmers.A study commissioned by the Agricultural Producers Association of Saskatchewan predicted serious impacts. Conducted by the University of Saskatchewan, it suggested the merger could raise export costs by 15%. It also forecast a 10% increase in processing margins. The study concluded this could mean a $770 million net annual loss for farmers..Heckman disputed these findings in an opinion piece. He argued the study relied on false assumptions and incomplete data. Specifically, he rejected the idea the merged company would operate G3 and Viterra export facilities as one unit. Bunge called this "objectively false."Canada's Competition Bureau (CB) also flagged concerns. It reported 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 CB warned of a significant loss of rivalry in Canadian agricultural markets. It believed competition could suffer in Western Canadian grain buying and Eastern Canadian canola oil sales. Bunge and Viterra challenged these conclusions.With the merger finalized, Bunge stated the new company is positioned to link major farming regions to high demand consumption areas. It expects better geographic balance, access to more markets, and a diversified crop network. The combined company also anticipates more stable finances and improved risk profiles..Under the deal terms, Swiss-based Glencore (Viterra's backer) received 32.8 million Bunge shares. This represents 16.4% of the enlarged company. Glencore also received about $900 million USD in cash. Final adjustments to this payment are possible.Sask NDP opposition expressed disappointment.."We have raised major concerns about the Bunge-Viterra merger from the start," said Aleana Young, Sask NDP Jobs and Economy Critic. “Those concerns came to us directly from producers, who are reported to lose $770 million in annual revenue and faced reduced competition. We remain concerned about the possible loss of hundreds of head office jobs in Regina. We know the company disputes the findings of that report.”Young criticized the provincial government for being "missing in action." She vowed the Sask NDP would watch closely, demanding Saskatchewan jobs and the economy remain the priority.
