The Competition Bureau has expressed reservations about Bunge Limited's planned acquisition of Viterra Limited, indicating potential anti-competitive effects in key agricultural markets across Canada.
The concerns, detailed in a report to the Minister of Transport, underscored the potential for reduced competition in grain purchasing in Western Canada and canola oil sales in Eastern Canada. The report, critical in Transport Canada’s ongoing public interest review of the transaction, emphasized the strategic implications for national transportation sectors.
The merger between the two agricultural giants is scrutinized particularly because of Bunge's position as a minority shareholder in G3 Global Holdings, a direct competitor to Viterra. The Bureau's findings suggested that Bunge’s involvement with G3 provides access to sensitive competitive information, which could influence market behaviours detrimentally.
The Competition Bureau’s comprehensive review included an analysis of numerous records, submissions, and data from Bunge, Viterra, and G3. Additionally, the review team conducted interviews with over 70 stakeholders and consulted with two independent experts to assess the merger's impact comprehensively.
According to the Bureau, the proposed transaction poses a significant threat to competitive dynamics, with potential harms extending beyond the immediate stakeholders to affect broader market structures and consumer interests in the agricultural sector.
The process now hinges on Transport Canada's public interest assessment, which is scheduled for completion by June 2. The findings from this assessment will guide the Minister of Transport's recommendations to the Governor in Council (Cabinet), which will decide whether the transaction should proceed.
This development follows Viterra and Bunge's notification to the Minister of Transport on August 15, 2023, regarding the proposed acquisition. The Minister initiated a public interest review on September 26, 2023, under subsection 53.2(2) of the Canada Transportation Act (CTA). As mandated by the CTA, the Commissioner of Competition is tasked with providing a detailed report on potential competition issues and evaluating the adequacy of any undertakings by the merging parties to mitigate these concerns.
According to the Bureau, Viterra and Bunge are two of Canada’s most prominent agricultural players, specializing in grain purchasing, processing, and export/marketing. The ongoing review and subsequent governmental decision will determine the future landscape of agricultural competition in Canada, with significant implications for market participants and consumers alike.