Glencore/Viterra marriage clears regulators

Swiss commodity giant Glencore International has received the all-clear from Canadian and U.S. antitrust watchdogs to buy Canada’s largest grain handler.

Glencore reported Friday it has received a “no action” letter from the office of Melanie Aitken, Canada’s commissioner of competition on its proposed takeover of Viterra.

The letter, dated Thursday (May 3), “indicat(es) that she does not intend to oppose completion of the previously announced acquisition of Viterra… by Glencore at this time,” Glencore said in a statement.

Aitken’s letter satisfies one of the conditions Glencore needs to conclude its $6.1 billion proposal to buy Viterra.

The company then plans to sell substantial portions of Viterra’s assets to Canada’s No. 2 handler, Richardson International, and to fertilizer and ag retail giant Agrium.

Glencore on Friday also noted that the waiting period in the U.S. under that country’s Antitrust Improvements (Hart-Scott-Rodino) Act expired the previous day.

The Hart-Scott-Rodino Act requires parties to “large mergers and acquisitions” to file pre-merger notification with the U.S. Federal Trade Commission and Department of Justice. During the “waiting period” that follows, the two antitrust enforcement agencies analyze the likely competitive effects of the proposed transaction.

The parties may not close a deal until either the waiting period outlined in the Act has expired or the U.S. government grants “early termination” of the waiting period.

Still to come

As a foreign takeover, Glencore’s planned purchase of Viterra still requires federal government approval and a positive vote from Viterra’s shareholders.

Those holding Viterra shares as of April 23 this year are to vote on Glencore’s offer at a special meeting, scheduled for May 29 at the Hyatt Regency in Calgary.

The government of Saskatchewan, the home province of Viterra’s head office, has also commissioned a third-party analysis by Informa Economics on the Glencore bid. Informa’s report is due by Monday (May 7) but isn’t expected to be publicly released immediately.

Also, the Canadian Press news agency reported Friday that the Canadian Competition Bureau’s “no action” letter applies only to the sale to Glencore, and does not cover the sales of Viterra assets to Richardson and Agrium, which still must be reviewed separately.

Glencore’s arrangements, announced in March, would see Calgary-based Agrium buy Viterra’s retail agri-products business, plus Viterra’s 34 per cent stake in Canadian Fertilizer Ltd., from Glencore for $1.8 billion.

Winnipeg’s Richardson, meanwhile, would buy 23 per cent of Viterra’s Prairie grain handling assets, “certain processing assets” and the remainder of Viterra’s Prairie retail business, from Glencore for $800 million.

Glencore said in March that its purchase of Viterra was “not conditional” on its agreements with Agrium and Richardson being completed.

Related stories:
Sask. farms out review of Viterra takeover, March 30, 2012
Glencore confirmed as Viterra’s six billion dollar suitor, March 20, 2012

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