Grainswest - Spring 2024

Spring 2024 Grains West 12 THE FARMGATE WHILE THERE’S NO TINDER FOR business, Bunge and Viterra hope they’ve found the perfect match. The two compa- nies announced their intent to merge in June 2023. Viterra brings more than 80 Canadian grain-handling centres to the blossoming relationship, along with sales to more than 70 nations. For its part, Bunge is the world’s largest processor of oilseeds, with 300 operations in 40 coun- tries. Of course, with a celebrity wedding comes major scrutiny. In addition to reviews by regulators in the U.S., Transport Canada is conducting a public interest assessment that must be complete by June 2, while the Com- petition Bureau will also scrutinize the agreement. “Viterra has a long history in Canada and is one of our largest grain handlers,” said Shannon Sereda, director, government relations, policy and markets for Alberta Grains. The proposal includes Bunge buying a 70 per cent stake in Viter- ra, at a total price of around $34 billion. “It’s a massive deal,” said Sereda. “We see this as continued consolidation in agri- culture. Bunge is more focused on oilseed production, whereas Viterra is a major grain buyer at the elevator level. From a wheat and barley perspective, we are looking more at Viterra’s operation and the impact of a merger on those elevator facilities, as that’s where our farmers sell their grain.” Such corporate consolidation in agriculture always sparks concern about competition. “Mergers like this can mean fewer marketing options for farmers,” said Sereda. “If it increases the distance to market, that can raise costs for the farmer, thereby reducing competitiveness and profitability.” Jon Driedger is vice-president of Left- Field Commodity Research in Hanover, MB. He shares these concerns. BRACE FOR IMPACT “I think the impact on competition is the main worry for growers, and not knowing what that impact will be,” said Driedger. “Those who favour the merger point out that Viterra is mainly an exporter han- dling a range of crops, and Bunge is a do- mestic crusher that primarily buys canola. In many respects, their businesses don’t overlap the way they would if Richardson and Cargill merged, for example.” Onthevergeof amerge Big step for two ag giants The potential merger of Viterra, with its vast grain-handling and trade capacity, and Bunge, with its oilseed processing operations in 40 countries, represents a massive agribusiness deal.