Canadian government puts Bunge-Viterra merger under review

In June, Bunge and Viterra announced the merger of both companies to form an agri-trading conglomerate worth $34 billion (€32.4M).

Both companies hold ownership interests in port terminals across Canada and the country’s federal government has launched a “public interest assessment” of the deal to review its implications on the country’s supply chain sector.

“Given this transaction is of significant national interest in Canada’s transportation sector and the broader supply chain, it will be reviewed under the mergers and acquisitions provisions of the Canada Transportation Act,” says Canadian Transport Minister Pablo Rodriguez.

Rodriguez admits that healthy competition in the transportation sector “is necessary” to ensure fair pricing and access for users, especially for Canadian farmers.

What’s next?

The assessment, which is expected to be completed by 2 June 2024, will include consultations with Canada’s ports and marine industry, stakeholders, government departments, as well as Canadians and other orders of government.

A report with all the conclusions will be submitted by the Commissioner of Competition to the Minister, that will then make a recommendation to the Governor in Council for consideration.

Officials told GlobalPETS that the Minister could potentially request Bunge and Viterra to address any concerns about the merger.

The Government of Canada can allow or disallow the acquisition and set terms and conditions for an approval.

Respect for the process

Missouri-headquartered Bunge said to GlobalPETS that they respect the review process of the Canadian authorities as transactions of this nature “require regulatory approvals in multiple countries.”

“We look forward to working with the Minister of Transport and the team at Transport Canada to show that any impact the merger may have on transportation will be beneficial to Canada,” says a company spokesperson.

The company believes that the timeframe to close the transaction by mid-2024 “remains unchanged.”

The acquisition costs: nearly $60 million

Viterra reported revenue of $28 billion (€26.6B) in the first 6 months of 2023, an increase of 18%. Net income was $130 million (€123.7M) for the first 6 months of the year, including $32 million (€30.4M) in acquisition costs from Bunge.

Bunge reported a net income of $1.2 billion (€1.1B) during the same period in 2023, a 28% increase, while net sales reached $21.7 billion (€20.6B). This is 9% less than during the same period last year. Net income for the 3 months ending 30 June 2023 reached $622 million (€591.8M). This included $26 million (€24.7M) of acquisition and integration costs for Viterra.