Canada’s Competition Bureau has raised concerns about Bunge’s proposed takeover of rival Viterra, citing potential competition issues in the grain and canola markets. The merger, valued at $34 billion, would create a dominant player in these sectors. The Competition Bureau specifically identified concerns over reduced competition in Western Canada for the purchase of farmers’ crops and in Eastern Canada for the sale of canola oil. Additionally, Bunge’s minority stake in Viterra competitor G3 has been flagged as a potential problem.
Analysts have highlighted Canada as a key region where the companies’ assets overlap significantly. The Competition Bureau has indicated that it will require the companies to address concerns related to competition and transportation. This may involve the divestiture of assets in certain markets. Experts suggest that Bunge could potentially address Canada’s concerns by selling its stake in G3 and a Western Canadian crushing plant. G3’s modern facilities and strategic location make it an attractive asset, and canola-crushing facilities are also expected to draw strong buyer interest.
Louis Dreyfus, which is expanding its canola-crushing capacity in Canada, has been mentioned as a potential buyer for both assets. Richardson International and Cargill are also logical candidates, as they are established players in the canola-crushing and grain-handling industries. Regulators in multiple jurisdictions, including the U.S., European Union, Brazil, and China, are still reviewing the deal, which Bunge’s CEO Greg Heckman expects to close by mid-2023. However, Heckman expressed optimism, stating that he does not foresee the need for remedies in Canada.
Despite Heckman’s confidence, experts believe that Bunge will likely need to divest assets to gain approval from Canadian regulators. Ellen Goddard, a professor emerita of agricultural economics at the University of Alberta, emphasized that buyers with networks that complement the available assets would be logical choices. However, Goddard also noted that buyers may have leverage to pressure Bunge into including additional facilities in any deals. The Competition Bureau’s specific concerns about reduced competition in canola purchasing around Bunge’s crushing plants in Saskatchewan and Manitoba, as well as in the sale of canola oil in Ontario and Quebec, will guide the divestiture process. Murray Fulton, professor emeritus of public policy at the University of Saskatchewan, believes that the companies have likely already begun working on addressing these competition concerns.
