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Competition Bureau won’t challenge Glencore’s $6.1B Viterra takeover

May 4, 2012, - Ottawa, ON - Canada's Competition Bureau does not intend to challenge Glencore International's proposed $6.1 billion takeover of Viterra Inc. (TSX:VT), but has yet to decide on deals that would put some of the grain handler's assets in the hands of Canadian companies.

The federal watchdog said Friday it issued a "no action" letter to the Swiss commodities producer.

"A no action letter confirms that the Bureau has reviewed a specific proposed merger and concluded that it will not, at this time, challenge that proposed transaction before the Competition Tribunal under the merger provisions of the Competition Act," said bureau spokesman Greg Scott.

Glencore said the decision satisfies one of the conditions on the closing of the deal.

The takeover by a foreign company has come under government scrutiny because of potential effects on the Canadian market.

Much of the business would remain in Canadian hands because under the deal Calgary-based Agrium Inc. (TSX:AGU) and privately held Richardson International, based in Winnipeg, would buy the majority of Viterra's Canadian assets for a combined $2.6 billion in cash.

But the Competition Bureau said it's decision not to block Glencore's bid does not apply to the third party deals struck with Agrium and Richardson.

"The No Action Letter only relates to the proposed transaction. It does not contemplate any subsequent transactions involving third parties outside of Glencore International plc and Viterra Inc.," Scott said.

"Reviews of subsequent transactions will be conducted independently."

Viterra has called a special meeting of shareholders for May 29 to vote on the proposed takeover.

Glencore, through an indirect subsidiary, has agreed to acquire all of Viterra's outstanding shares at a price of $16.25 in cash per share.

The company's major shareholder, Alberta Investment Management Corp., together with Viterra's directors and executive officers have agreed to support the arrangement and vote their shares in favour. They collectively own or exercise control or direction over approximately 16.5 per cent of Viterra's shares.

Viterra has operations across Canada, the United States, Australia, New Zealand and China, as well as a growing international presence that extends to offices in Japan, Singapore, Vietnam, Switzerland, Italy, Ukraine, Germany, Spain and India.

It operates in three distinct business segments, grain handling and marketing, agri-products and processing.

Glencore is one of the world's leading integrated producers and marketers of commodities, with worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of metals and minerals, energy products and agricultural products.

May 8, 2012  By The Canadian Press