The Canadian Competition Bureau has expressed significant competition concerns regarding the proposed merger between U.S. grains merchant Bunge (BG.N) and Glencore-backed Viterra. In a statement released on Tuesday, the bureau highlighted that the deal is likely to lead to substantial anti-competitive effects and a significant reduction in competition between Viterra and Bunge in agricultural markets across Canada.
The bureau’s assessment also indicated that the proposed merger could potentially harm competition in grain purchasing markets in Western Canada, as well as in the sale of canola oil in Eastern Canada. Following the completion of its review, the bureau has forwarded its report to Canada’s transport ministry, which has until June 2 of this year to conduct its own assessment of the deal. Ultimately, the federal Canadian government will make the final decision regarding the merger.
Last June, the bureau announced its decision to review the merger, which would result in the creation of an agricultural trading giant with an estimated value of around $34 billion, including debt. The combined entity would closely rival leading competitors such as Archer-Daniels-Midland and Cargill.
Bunge’s Chief Executive Officer, Greg Heckman, revealed in November that the company had initiated the process of seeking regulatory approvals for the merger in major jurisdictions across North and South America, Europe, and China.