Skip to main content

The Globe and Mail

Viterra takeover raises question of competition in Saskatchewan

Glencore takeover of Viterra raises competition issues: Saskatchewan


The proposed takeover of Viterra Inc. , Canada's largest grain handling company, has run into some opposition from the Saskatchewan government, which is concerned the deal could lessen competition in one key area.

Provincial Agriculture Minister Bob Bjornerud said farmers have been voicing their worries for weeks that the takeover will decrease competition in the sale of agricultural products such as fertilizer, seeds and farm equipment.

"Any time there's a possibility of losing a little bit of the competition that we already have, I know they are concerned and I've had that brought to my attention a number of times in the last couple of weeks," Mr. Bjornerud told reporters Friday. "So it's a concern that we really have."

Story continues below advertisement

Swiss-based Glencore International Inc. has launched a $6.1-billion bid for Regina-based Viterra, but it plans to sell a number of Viterra's assets. That includes unloading nearly all of Viterra's chain of 258 retail stores. Glencore plans to sell the stores to Agrium Inc. for $1.8-billion. Calgary-based Agrium is major fertilizer producer and it operates more than 1,200 retail stores in Canada, the United States, Australia and elsewhere.

A government-commissioned review of the transaction by Informa Economics noted that if the deal goes through Agrium will control 42 per cent of the retail market in Saskatchewan, compared to 37 per cent presently for Viterra. Agrium also controls a majority of the wholesale market for nitrogen fertilizers, giving the company a potentially dominant position in both retail and wholesale.

However, the review pointed out that Agrium operates its wholesale and retail divisions separately. The concern arises if the company decides to co-ordinate the two going forward.

Mr. Bjornerud said the government will raise that issue with Industry Canada and the Competition Bureau, which will review the proposed takeover in detail if it is approved by Viterra shareholders on May 29. The bureau has given preliminary approval to the takeover, but has not looked at the details.

Agrium spokesman Richard Downey said the company has no intention of merging its retail and wholesale operations. "I guess I was a little surprised that they would imply that we might even consider changing our business model in Canada on the retail and wholesale side where we have been operating that way in the United States and Argentina for 20 years," he said Friday. "That's one surefire way to ruin both businesses."

Mr. Bjornerud said other parts of the deal are largely positive, including Glencore's plan to sell some Viterra grain elevators for $800-million to Winnipeg's Richardson International Ltd. That sale involves 19 of Viterra's 92 elevators, substantially boosting Richardson's share of the grain-handling business. Viterra controls about 45 per cent of grain-handling in Canada and that will fall to about 35 per cent after the takeover. Richardson's share will increase from around 25 per cent to about 34 per cent.

Report an error Licensing Options
About the Author
European Correspondent

Paul Waldie has been an award-winning journalist with The Globe and Mail for more than 10 years. He has won three National Newspaper Awards for business coverage and been nominated for a Michener Award for meritorious public service journalism. He has also won a Sports Media Canada award for sports writing and authored a best-selling biography of the McCain family. More

Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at