China’s approval on Viterra takeover awaited

All necessary approvals from domestic and foreign antitrust authorities, except one, are now lined up behind Swiss commodity giant Glencore International’s friendly takeover bid for Canada’s biggest grain handler.

The "sole remaining regulatory approval" is still to come from China’s ministry of commerce (MOFCOM) under that country’s Anti-Monopoly Law, Viterra confirmed in a release Monday.

MOFCOM is now expected to continue its review into September, Viterra said, noting Glencore "continues to engage" with the ministry to ensure its approval "as soon as possible."

Regina-based Viterra’s assets in China include a joint-venture investment in a canola crushing facility, plus a trading office in Shanghai and a representative’s office in Beijing.

The crusher investment, worth up to US$25 million, is in the Chinese port city of Fangchenggang, where the company partnered with Guangxi Beibu Gulf International Port Group, the state-owned port authority for Guangxi province.

The 680,000-tonne capacity crush plant was commissioned in fiscal 2011 and described by Viterra as "our first substantial investment asset on the ground" in China.

Other than MOFCOM’s sign-off, Glencore said Monday that "substantially all regulatory approvals have now been received," including clearances from competition and foreign investment authorities in both Canada and Australia.

Glencore had said in July that MOFCOM’s review was expected to continue into August, which at the time scuttled the two companies’ expectation that they could seal their deal by the end of July.

Rather, the companies said Monday they "will update the market in due course when they expect closing of the acquisition to occur."

Canadian agribusinesses Agrium and Richardson International remain poised to buy a number of Viterra’s ag retail, grain handling and processing assets from Glencore, in deals worth $1.8 billion and $800 million respectively.

Those deals also require approvals, not yet granted, from Canadian authorities. Successful conclusions to those two sales, however, are not conditions in Glencore’s takeover agreement with Viterra.

Related stories:
Glencore’s Viterra takeover wins federal government blessing, July 15, 2012
Australian competition watchdog clears Viterra bid, June 7, 2012
Viterra stockholders back Glencore takeover, May 29, 2012
Glencore/Viterra marriage clears regulators, May 5, 2012
Richardson’s Prairie grain handle would rival Glencore’s, March 20, 2012

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