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Viterra would have been a target even without Wheat Board changes

When word leaked that Viterra Inc. was a takeover target, the immediate assumption was that interest in the company was driven by changes to the Canadian grain market in the wake of the federal government eliminating the monopoly on export sales held by the Canadian Wheat Board.

Journalists certainly made the link, as did politicians who were looking for a way to re-open the debate on the Wheat Board. But that wasn't the primary driver, say people involved with the purchase of Viterra by Glencore International Plc, Agrium Inc. and Richardson International. That despite the fact that talks on the Glencore side about opportunities in Canada began about the same time as the Conservative government in Ottawa began talking in earnest about ending the Wheat Board monopoly.

The timing is just as much about a global phenomenon -- as there's worldwide consolidation happening in grain and crop handling, Leo de Bever, head of Alberta Investment Management Co. told the Globe and Mail's Tara Perkins. AimCo is the largest shareholder of Viterra. Those comments were echoed by people on the Glencore side of the trade as well.

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"People will try to make that link but I think what's more important is that there's a scramble for this kind of company on a global basis," said Mr. de Bever.

As the grain trade becomes more international, companies with global reach have an advantage.

That's all true, but it's hard to believe the timing is totally unrelated. The Wheat Board's end must have been an added reason to prioritize Canada for an international acquirer. There is an upside bet on Viterra based on the end of the Wheat Board and the ability of a company like Viterra -- now Glencore -- to do more marketing. Viterra had signalled it expected a big increase in earnings. And for Glencore, which needs wheat to fulfill contracts written by its grain marketers, having the ability to go around the Wheat Board means more control over its destiny.

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