Criticism of Bunge-Viterra merger grows as Ottawa reviews proposed deal

The federal government is still evaluating a proposed merger involving two large agri-business companies, but criticism of the deal is growing.

Missouri-based Bunge Global SA is trying to take over Viterra Ltd. If allowed to go through, the merger would create a new company valued at US$34 billion.

In April, the proposed merger came under criticism from Canada’s Competition Bureau, which raised concerns about anti-competitive effects on the market. The Agricultural Producers Association of Saskatchewan (APAS) also expressed concerns.

The federal Ministry of Transport said it had completed and sent its public interest assessment to the minister, who will consult with the Competition Bureau commissioner on whether the deal will decrease competition. The ministry said the two companies could be asked to take certain steps if there are issues.

“Bunge and Viterra will then be requested to address these concerns and identify any measures they are prepared to undertake,” the ministry said in a statement, adding that the final decision will be made by the federal cabinet. “The government is committed to concluding the regulatory processes as quickly as possible.”

Steve Torgerson, general secretary for the Grain and General Services Union (GSU), which represents workers at various Viterra facilities around Saskatchewan along with some employees at the company’s head offices in Regina, said the union has concerns about the merger possibly leading to job losses, specifically at the offices in Regina.

He said the union has also heard from its members about what the deal could mean for farmers and farming communities.

“These are concerns that our members also have about market concentration and reduced competition,” he said.

Torgerson said the union’s official position is that it opposes the merger. He said job losses are one issue, but the union’s primary worry is the amount of the market the merged company would control.

He said if the merger happens, 40 per cent of the Port of Vancouver would be under the new company, since Bunge owns 25 per cent of G3 Canada Ltd., which operates a grain terminal in the port while Viterra operates two terminals there.

“That’s too much; that puts too much power, too much influence in one entity,” he said.

Bunge said the new combined company would be committed to Canadian workers and that it has no plans to close any facilities in Canada, including Viterra’s head offices in Regina.

“We are keeping our important office presence in Regina and will continue to employ thousands of Canadians with well-paying jobs across the country,” the company said in a statement.

Bunge said the new company would be operating in a competitive environment against dozens of other companies. As for concerns about the concentration at the Port of Vancouver, Bunge said the merged company will operate separately from G3.

“G3 and Viterra are competitors today and G3 will be a strong competitor to a combined Bunge-Viterra after the merger,” the company said.

Bunge said it continues to work with the federal government as the proposed deal is reviewed.