The APAS and other farm groups have expressed concerns the deal would lead to decreased competition in the sector
Michael Joel-Hansen
Saskatoon StarPhoenix
The federal government’s approval of Bunge Global SA’s $8.2-billion acquisition of Viterra Inc. is drawing mixed reactions from farming groups.
The government on Wednesday approved the deal, but only on the condition that Bunge sells six grain elevators and invests at least $520 million within Canada over the next five years. Controls were also placed on its minority ownership stake in Saudi-owned grain company G3 Canada Ltd.
Bill Prybylski, president of the Agricultural Producers Association of Saskatchewan (APAS), who farms in the province’s southeast, said the news did not catch the organization by surprise, given the conversations it had had with policymakers at both the provincial and federal levels.
“We didn’t get a real good feeling that they were prepared to stand in the way (of the acquisition),” he said.
Since the deal was announced, APAS and other farm groups have expressed concerns that allowing the two companies to come together would lead to decreased competition in the grain handling sector and hurt producers. Prybylski said this remains a concern.
“Obviously, with reduced competition, there’s always a concern about (the) financial impact to farmers,” he said.
Prybylski said forcing Bunge to sell six grain elevators was something APAS suggested early in the process, and the organization is happy the government recognized Bunge’s partial ownership of G3 could be a problem, even though the conditions mostly relate to who Bunge can put on G3’s board.
“What exactly does that mean? Who’s eligible, who isn’t eligible? Those types of things are still concerning,” he said.
The Grain Growers of Canada, meanwhile, said it was disappointed by the federal government’s approval, with executive director Kyle Larkin saying the conditions imposed do not go far enough.
“The divestment of six grain elevators is a token gesture in the face of a company that maintains a 25 per cent stake in G3, greatly reducing competition across the Prairies and in Quebec,” he said in a release.
Another group concerned about the deal is the Grain Services Union (GSU), which represents workers at Viterra’s head offices in Regina along with workers at its elevators in Saskatchewan. General secretary Steve Torgerson said the union has been raising concerns about what combining the two companies could mean for workers and farmers since the deal was announced two years ago.
Job losses at Viterra’s head offices are a top concern for GSU since the conditions of the deal only require the office be kept open for five years and maintain a head count of around 200 employees.
“That’s actually disappointing, because I would expect this company is going to be around for a lot longer than five years,” Torgerson said.
He said he would not be surprised to see jobs lost at the Regina office as the new combined company may try to consolidate operations in order to save money.
Torgerson does not believe the conditions of the merger related to Bunge’s ownership of G3 create any significant separation between the two entities, noting that the combined company will control a significant share of the sector’s export capacity.
“We’re now going to see a company that will now have 40 per cent of the grain port access in Canada; that’s pretty significant,” he said.
The Government of Saskatchewan said it is looking over the terms and conditions of the deal and is focused on protecting Saskatchewan farmers, but is happy the federal government made its decision ahead of the 2025 crop year.
“Our priority is ensuring Saskatchewan producers continue to be competitive with access to key global markets,” it said in an emailed statement.
Bunge said it appreciated the dialogue with officials during the approval process and that the new entity will be beneficial for both farmers and consumers.
“With the Canadian approval, we are nearing completion of the regulatory process and expect to close in early 2025,” it said in an emailed statement.
