Last spring, a study commissioned by Prairie agricultural groups concluded the planned Bunge-Viterra merger was likely to result in substantial anti-competitive effects and harm competition in markets for grain purchasing. The study said the deal could end up costing farmers more than $700 million annually.
In a report to then-transport minister Pablo Rodriguez last year, the Competition Bureau also raised concerns about the deal, including the potential for Bunge to materially influence the economic behaviour of G3 Global Holdings (G3), a major competitor to Viterra. As a minority shareholder of G3, Bunge has access to G3’s confidential competitively sensitive information, it said.
One of the conditions of the federal government’s approval of the merger is that strict and legally binding controls are needed on U.S.-based Bunge’s minority ownership stake in G3 to ensure it can’t influence that company’s pricing or investment decisions. Ottawa further said Bunge must divest itself of six grain elevators in Western Canada, which will “maintain competitive options for farmers in the region.”
Other conditions of the deal include a price protection program for certain purchasers of canola oil in Central and Atlantic Canada to safeguard fair pricing and market stability; retaining Viterra’s head office in Regina for at least five years to protect Canadian jobs; and a binding commitment from Bunge to invest at least $520 million in Canada within the next five years.
Source : Syngenta.ca