CANADA- Two pension funds, Canada Pension Plan Investment Board and British Columbia Investment Management Corp, have declared their support of the potential Viterra-Bunge merger, according to people with direct knowledge of the matter, Bloomberg reported.
The possible merger would create a US$25 billion behemoth that will be one of the largest global commodity traders.
According to the anonymous source, these two pension funds are willing to swap their combined 49.98% stake in Viterra for investment in the resultant entity.
Glencore has toyed with the idea of a partnership with Bunge on and off for years, and there’s no certainty it will be able to reach an agreement this time around. The Swiss commodities trader approached Bunge about a friendly takeover in 2017 but was publicly rejected by the US firm.
However, while it is still uncertain that the ongoing talks between the two industry giants will lead to the speculated merger, it is a highly likely outcome, and it now has the endorsement of two major Canadian pension funds.
This merger with Viterra would strengthen the place of Bunge in commodities elevation significantly, with access to export terminals in the United States, one of the largest grain producers and suppliers.
It would bolster Bunge’s position among the top four major commodity traders, the other three being American Archer Daniels Midland, Cargill, and French Louis-Dreyfus Group.
Resistance from wheat groups
While this possible merger has been met with positive anticipation from some groups, various Canadian wheat groups are apprehensive about the merged entity.
“Early concerns would be competitiveness,” Western Canadian Wheat Growers Association President Gunter Jochum said Friday in a BNN Bloomberg TV interview.
According to him, the merger would limit the choices of producers, which could negatively impact grain pricing.
“If there’s one less player in the market, one less grain buyer for farmers, that means less competition for my grain, and it could potentially mean lower prices for farmers,” he added.
Viterra partners on hunger project in Canada
In other news, Viterra Canada is celebrating eight years of working Canadian Foodgrains Bank to end global hunger.
Viterra has provided 172 acres of land around four of its terminals in Alberta and Saskatchewan to the Foodgrains Bank.
“We’re proud to continue working with Canadian Foodgrains Bank to support their hunger response initiatives in several countries throughout the world,” said Kyle Jeworski, CEO of Viterra Canada.
Additionally, farmers working at Viterra terminals in Balgonie, Grenfell, Raymore, and Trochu who are motivated by the goal of ending hunger will be volunteering their time, expertise, and resources to harvest crops, raising funds to support the work of the Foodgrains Bank around the world.
As the Foodgrains Bank celebrates its 40 years of working to end hunger worldwide, executive director Andy Harrington says he is particularly grateful for the generosity of Canadian farmers, who started this mission in 1983 and have continued it ever since.
Viterra Canada echoed the same gracious sentiments, recognizing the critical importance of food security and its role in supporting people in areas of need as a global agricultural leader.
“I’d like to thank our farmer volunteers for their ongoing dedication to these growing projects, donating their time and resources to ensure they’re successful year in and year out,” Jeworski added.