Glencore International Plc's (GLEN) proposed C$6.1 billion
($6.12 billion) takeover of Viterra Inc. (VT.TO) may reduce
competition in retail fertilizer sales, according to a report
prepared for the Saskatchewan government, Bloomberg reported.
Glencore's acquisition of Canada's largest grain handler
includes a side deal to sell 90% of Viterra's domestic retail
outlets to Agrium Inc. (AGU.TO), a Calgary-based fertilizer
producer that is already North America's largest farm retailer.
"There is some concern about competition in the farm input
sector, particularly regarding nitrogen fertilizers, due to the
acquisition of most of Viterra's retail input facilities by
Agrium," according to an e-mailed summary of the report by Informa
Economics Inc., a Memphis, Tennessee-based independent research
company, that was released today.
The report says that Glencore's purchase of Viterra will
initially have "minimal impact" on competition in grain-handling
and the only job losses will be limited to head-office employees.
Regarding the sale of the retail assets, Informa says that while
Agrium may have the ability to influence fertilizer prices, there
is no evidence the company would take "anticompetitive
Canada's federal government rejected a $40 billion hostile bid
by Melbourne-based BHP Billiton Ltd. (
) for Potash Corp. of Saskatchewan Inc. (POT.TO) in 2010, saying
the proposal for the world's largest potash miner didn't provide a
"net benefit" for Canada.
Saskatchewan Premier Brad Wall, who opposed the Potash Corp.
bid, said last month the sale of Regina-based Viterra is "a lot
different" in terms of both the scope and assets involved.
Saskatchewan said in a statement today that it wants the federal
government to make approval of the acquisition conditional on
Glencore keeping to commitments to establish its North American
headquarters in Regina and investing C$100 million in the Canadian
grain-handling industry in the next five years.
"It can be concluded that the initial Glencore acquisition will
have a minimal effect on competition within the grain-handling
system," the Informa report said.
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