Murray Wood: Who's scary... and who's scary good?
Every Friday, Murray Wood takes a look at the week's news and decides who's hot... and who's not. This week, in a specia...
United States-based oilseed crushing company Bunge Ltd. and Viterra Ltd. have sealed a deal to merge and create a $34-billion agricultural powerhouse organization.
Viterra is one of North America’s largest grain handlers, while Bunge is the world’s largest oilseed crushing company.
This is the second attempt at a merger. In 2017, Glencore — the parent company of Viterra — tried to purchase Bunge.
With this deal, Bunge will assume $9.8 billion worth of Viterra debt.
Shawn Haney, the founder of RealAgriculture, said “it’s yet to be determined” what this will mean to farmers, but there shouldn’t be any threats to competition.
“There is not a lot of overlap,” said Haney, whose show Real Ag is heard on the weekend on CJME and CKOM. “Bunge does not have elevators on the countryside on the Western Canadian prairies, so that would be advantageous to have the Viterra business that definitely does.”
Where the overlap does happen is in crushing and processing.
The company merger is promising to meet the demands of farmers by offering complex markets. Haney said time will tell if the company can follow through on these demands.
In 2021, Viterra announced it would be building a a canola crushing plant aimed to open in 2024. Haney is wary if this operation will still be up for construction.
“I think maybe the big potential to farmers in Saskatchewan could be to watch what happens with the proposed Viterra crush plant in Regina, and is that on or off when it comes to this deal actually happening,” he said.
“I think something that is of keen interest to people in Saskatchewan is what will happen to the jobs at Glencore.”
Bunge’s headquarters currently are in the United States. Viterra’s headquarters are currently located in Regina.
“Obviously they aren’t all going to be going away, but how much will that reduction be going forward?” said Haney.
