THURSDAY, MARCH 22, 2012
VOL. 90 | NO. 12 | $3.75
SPECIAL REPORT |
SERVING WESTERN CANADIAN FARM FAMILIES SINCE 1923
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LIFE IN AN OPEN MARKET
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VITERRA | FOR SALE?
VITERRA | FOR SALE?
Farm groups wary of takeover
Viterra confirms negotiations
Friendly takeover | Glencore may sell off assets, port facilities
Alliance between Glencore, Agrium and Richardson BY KAREN BRIERE
BY SEAN PRATT
REGINA BUREAU
SASKATOON NEWSROOM
Farmers, employees, shareholders and analysts are watching and waiting to find out who is behind a takeover bid for Viterra Inc. A statement issued by Viterra during a halt in trading March 19 didn’t say whether that party was a single company or a group. “Viterra confirms that it has begun exclusive negotiations with a party and the basis of this exclusive negotiation is at a price which is consistent with our previous statement,” the company said. Speculation settled on some type of bid by the Glencore-Agrium-Richardson alliance that emerged last week in media reports. Bloomberg quoted three unnamed sources in an article who said the Swissbased Glencore International PLC, Calgary-based Agrium Inc. and Winnipeg-based Richardson International Ltd. were close to a deal with Viterra.
Farm groups are leery of any potential Viterra takeover that would result in consolidation of the company’s substantial Western Canadian grain handling and crop input assets. Media reports indicate Glencore International PLC, a Swiss firm that is the world’s largest publicly traded commodity supplier, is attempting a friendly takeover of Canada’s largest grain handler along with two Canadian partners. The reports suggests Glencore and Richardson International would divvy up the company’s grain handling and food processing assets and port facilities while Agrium Inc. would get its crop input business. Viterra has a 45 percent share of Western Canada’s grain handling business and a 35 percent share of the agri-products market, according to the company’s 2011 annual report. The company owns 82 primary grain elevators and 11 special crops processing facilities in North America in addition to seven port terminals. It also operates 258 farm supply stores in Western Canada. Doug Chorney, president of Keystone Agricultural Producers, worries about Richardson getting its hands on some of that substantial grain handling volume. Richardson already controls about 25 percent of the western Canadian grain handling business through its 75 country facilities and four export terminals. “There’s no upside really for producers. It’s great if you’re Richardson I guess because you’re going to have so much market share,” he said. “It also makes it hard for the grain companies that are left to compete, especially with the terminal control at port because some of the smaller grain companies need to have access to that.”
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A potential Viterra sale would have implications for competition in handling and input sales. |
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