The federal government says it plans to review the $8-billion US sale of Canadian-based grain-handling firm Viterra to a foreign conglomerate.
Viterra is controlled by multinational commodities giant Glencore, which bought the company in 2011. Prior to that, Viterra was known as Saskatchewan Wheat Pool, a Regina-based co-operative that helped stabilize grain prices on behalf of farmers for decades.
While Glencore has majority control of Viterra, two major Canadian pension plans — the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation — also own minority interests in the company.
Amid a round of consolidation in the commodities sector earlier this year, U.S.-based agribusiness giant Bunge agreed to pay more than $8 billion to take over Viterra's assets and combine them with their own.
Viterra has about 1,600 employees in Canada, scattered across 75 locations primarily in Western Canada. But around the world, Viterra has a presence in three dozen countries, employing more than 16,000 people and moving more than 70 million tonnes of grain every year.
While shareholders of either company have yet to sign off on the plan, the proposed merger hit a roadblock Tuesday when Transport Minister Pablo Rodriguez announced the federal government is going to review the deal to ensure it will benefit Canadians.
"Both companies hold ownership interests in port terminals throughout our country," he said. "Healthy competition in the transportation sector is necessary to ensure fair pricing and access for users, especially for Canadian farmers."
Among other assets, Viterra owns the Cascadia and Pacific Terminals at the Port of Vancouver, a grain facility in Prince Rupert, B.C., two facilities in Thunder Bay, Ont., and one in Montreal.
"Given this transaction is of significant national interest in Canada's transportation sector and the broader supply chain, it will be reviewed under the mergers and acquisitions provisions of the Canada Transportation Act," Rodriguez said.
It's the second government review of the deal, after Canada's Competition Bureau announced in June it, too, would be taking a look at it.
The government says it has up to 250 days to complete its review, which kicks the date back to at least June 2024 for it to be approved.
Shares in Bunge fell almost two per cent, to their lowest level since August, on news that the government would once again be kicking the tires on the deal.