After the news leaked out last month, Rotterdam-based Viterra confirmed Tuesday morning it’s “concluded an agreement” to merge into Bunge — the St. Louis-based “B” in the “ABCD” of the companies handling the bulk of global grain trade — under the latter company’s banner.

Viterra’s shareholders, which include international commodities trader Glencore, the Canada Pension Plan Investment Board and British Columbia Investment Management Corp., will receive about 65.6 million shares in Bunge — worth about $6.2 billion — and $2 billion cash (all figures US$).

Once a $2 billion share repurchase plan Bunge announced in tandem with the merger is completed, the Viterra shareholders would together hold about 33 per cent of the merged company, up from 30 when the merger deal closes. Viterra shareholders would not take part in the share buyback plan.

The deal also calls for Bunge to assume about $9.8 billion in Viterra debt.

“Our highly complementary asset footprints will create a network that connects the world’s largest production regions to areas of fastest growing consumption, enhancing the geographical balance and adaptability of our global value chains and benefitting farmers and end-customers,” Bunge CEO Greg Heckman said in a release.

“In combining our highly complementary origination, processing and distribution networks, we are better positioned to meet the increasing demand for the food, feed and fuel products we offer,” Viterra CEO David Mattiske said in the same release.

“Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business.”

Heckman and Bunge CFO John Neppl would remain in their posts with the merged firm, while Mattiske would become the new firm’s “co-chief operating officer.”

The two companies said the combination is expected to generate about $250 million per year in gross pre-tax “operational synergies” within three years of closing, plus “significant incremental network synergies” and “relatively more stable cash flows from the larger, more diversified footprint.”

Those synergies, Heckman said on a conference call later Tuesday morning, would not be based on reduced staff head count but rather mainly on “operational” synergies such as asset utilization and procurement savings. In terms of human capital, he said access to talent in the agrifood sector is “at a premium.”

The combined firm would be based in St. Louis, where Bunge relocated its global head office from White Plains, N.Y. in 2019. Rotterdam, where Viterra’s global head office sits today, “will be an important commercial location in the future of the combined company.”

Glencore and CPP Investments would each be able to name two members to the merged Bunge board, while Bunge would nominate the remaining eight. Glencore and CPP’s shareholder agreements with Bunge also include a 12-month lock-up period on sales of Bunge shares.

For its part, Toronto-based CPP Investments said separately its 40 per cent stake in Viterra will translate to about a 12 per cent equity stake in Bunge and about $800 million.

On Tuesday’s conference call, Bunge said its own shareholders would have 70 per cent equity in the combined firm when the deal closes, while Glencore would have 15 per cent and BCIC, three per cent.

“Combining these two highly complementary companies will create an enhanced agribusiness that can provide an expanded product offering to end-customers, with an increased ability to innovate and promote sustainable practices in the global food supply,” Bruce Hogg, head of sustainable energies with CPP Investments, said in a separate release.

Glencore CEO Gary Nagle, in a separate release, said the deal “is expected to realize significant value for Glencore” and described the planned merged group as “a premier pure-play agribusiness solutions company, well placed to meet increased global demand as well as the ongoing challenge of providing sustainable, traceable food and feed products to customers around the world.”

Bunge and Viterra said the merger is expected to close in mid-2024, subject to the usual closing conditions, including approval by Bunge shareholders and the relevant regulatory approvals.

Those approvals are likely to include review by Canada’s Competition Bureau, given Viterra’s significant stakes in Prairie grain handling, oilseed crushing and port terminal capacity, and Bunge’s stakes in Canadian crushing and its part-ownership of Prairie grain handler G3.

Asked on Tuesday’s conference call about any plans to divest assets to appease regulators in countries where the two firms operate, Neppl described the companies’ asset footprints as “very complementary” and said Bunge looks forward to working with regulators and “helping them to understand the footprint.”

Viterra formed in 2007 in a merger of Saskatchewan Wheat Pool with Agricore United — the latter having formed in a 2001 merger of the former Alberta and Manitoba wheat pools with another former Prairie grain co-operative, United Grain Growers (UGG).

The Regina-based firm went international in 2009 with a deal for Australia’s ABB Grain, then was majority-acquired by Glencore in 2012, becoming Glencore Agriculture before rebranding as Viterra internationally in 2020. It expanded its U.S. footprint last year with a takeover of grain firm Gavilon.

Bunge formed as a trading company in Amsterdam in 1818, expanding to Argentina in 1884, Brazil in 1905 and North America in 1918, moving its global headquarters from Brazil to the U.S. in 2001, when it became a publicly traded company.

Bunge’s stake in Winnipeg-based G3 was acquired through a joint venture with a Saudi state grain firm in 2015, which bought the assets of the privatized Canadian Wheat Board. — Glacier FarmMedia Network

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Winnipeg grain handler G3, whose grain terminal at Trois-Rivieres, Que. has storage capacity for 109,000 tonnes, reported Wednesday the terminal has so far unloaded over 160,000 tonnes of imported grain from incoming ships in 2022.

That total marks “far more than the facility has ever handled in one year,” the company said in a release.

The Trois-Rivieres site — like G3’s three other port terminals in Eastern Canada — is focused mainly on loading ships with grain for export. However, G3 said Wednesday, it’s also the only port facility in the Great Lakes-St. Lawrence Seaway system able to unload grain from Panamax-class bulk ships and transfer it onto trucks, trains or smaller laker vessels.

Included in the 160,000-tonne total so far this year were 30,000 tonnes of inbound grain just recently unloaded from a single vessel, sent to Canada from an overseas supplier, G3 said.

The jump in demand for inbound grain is “due to a shortage of some crops caused by drought last year in Western Canada,” G3 said.

Given the supply situation, G3 CEO Don Chapman said the company is providing “important capacity to import grain when needed.”

The Trois-Rivieres facility has been operating “around the clock” to handle the increased imports, the company said, while still receiving “thousands of truckloads” of corn, soybeans and other crops from Quebec growers to load on outbound vessels for export.

The Trois-Rivieres terminal, formerly known as Les Elevateurs des Trois-Rivieres (ETR), came to G3 in 2013, when the company, then known as CWB, bought the port terminal assets of Toronto’s Upper Lakes Group.

ETR’s annual grain throughput at that time was estimated at around six million tonnes. The site has 35 feet of water at its berth, thus allowing it to handle inbound and outbound ocean-class bulk vessels loaded to deeper drafts. — Glacier FarmMedia Network

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G3 announced Monday it had completed the sale of the ag input business adjacent to its elevator west of Plenty, Sask., to Saskatchewan input and bulk fuel dealer Rack Petroleum, a.k.a. The Rack. The dollar value of the sale wasn’t disclosed.

The fertilizer and input retail business at G3’s Prairie West elevator had operated at the site since before it became part of G3, the company said. Selling the retail side to The Rack “allows G3 to focus on its core grain handling business.”

The Rack said it will operate the retail business and expand its agronomy offering, and will also make bulk farm fuel delivery available to the area.

“This move ensures that customers have continued and improved access to crop inputs services conveniently located alongside the G3 grain terminal,” G3 said.

Headquartered at Biggar, about 75 km northeast of Plenty, The Rack started in 1984 as a bulk fuel agent and expanded into crop input supply and service, then became a stand-alone independent retail business under its current name in 2001.

Along with its Biggar and Plenty operations, The Rack today has retail offices in nine other western Saskatchewan communities.

“The Rack is focused on being a leader of innovation and offering science-backed knowledge and we look forward to gaining the trust of local producers to meet their needs as we continue to support rural Saskatchewan,” Rack CEO Dennis Bulani said in G3’s release.

The Plenty elevator and retail operation came to G3 — then known as CWB — in 2014, when it bought full control of farmer-owned grain handler Prairie West Terminal, which built the concrete terminal there in 1998. — Glacier FarmMedia Network

CORRECTION FROM SOURCE, July 20, 2022: An earlier version of this article incorrectly identified The Rack’s CEO.

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Court of Queen’s Bench Justice Chris Martin delivered his written judgment Tuesday in Winnipeg, clearing the way for a judge to hear the allegations on behalf of an estimated 70,000 or so western Canadian farmers who delivered grain to the wheat board’s pool accounts in 2010-11 and 2011-12.

“I think it is good news for the farmers who felt they weren’t dealt with fairly when (Agriculture Minister Gerry) Ritz and (Prime Minister Stephen) Harper were privatizing the wheat board,” Stewart Wells, a Swift Current, Sask., farmer and member of the Friends of the Canadian Wheat Board, said in an interview Thursday. “The wheels of justice grind slowly but they’re still grinding.

“It’s the first major progress since the case was launched in 2012 and it’s certified so this is going to be heard in court. It’s just not going to be swept under the rug somewhere. So that’s a pretty major advancement.”

However, Wells didn’t rule out the possibility that the government and G3 will appeal Justice Martin’s decision.

An out-of-court settlement is also possible.

The Harper government government removed the CWB as the sole marketer of western Canadian wheat and barley destined for export or domestic human consumption Aug. 1, 2012.

In 2015, G3 (Global Grain Group), newly formed to subsume the CWB, agreed to invest $250.5 million and in return received the CWB’s assets from the federal government.

G3 is a joint venture firm majority-owned by the state-owned Saudi Agricultural Livestock Investment Co. (SALIC) and Bunge.

The lawsuit brought by Brookdale, Man., farmer Andrew Dennis alleges Ritz acted unlawfully by taking $150.9 million of farmers’ money from the CWB’s pool accounts to help privatize the wheat board.

One hundred and forty-five million dollars was used to triple the wheat board’s contingency fund and $5.9 million went to cover some of the transition costs.

Under the Canadian Wheat Board Act, all money collected in the CWB’s pool accounts earned from marketing farmers’ grain was required to be paid to farmers, less board operating expenses.

“What’s alleged is that Gerry Ritz… was acting illegally and not in good faith — the legal phrase is misfeasance while in public office — when he directed money to the contingency fund that we argue ought to have been paid to farmers instead,” Wells said.

“We argue that he was morally and legally wrong to be hiving off money that should have gone to the pooling accounts and been paid to farmers but instead he was trying to build up the Canadian Wheat Board as an entity so he could later on give it away to Saudi Arabia and Bunge.”

The CWB’s board of directors unanimously passed a resolution calling on the government to cover the cost of privatizing the board instead of farmers, Wells said.

“And then Ritz said in public that he would pick up all the cost, but when the (CWB’s) final annual report came out it showed that they had taken $5.9 million out of the pooling account to cover restructuring costs,” he said. “It makes no sense. It just loops back to the notion that farmers weren’t being treated fairly.”

The suit also asks for $10 million, plus interest since 2012, in damages, bringing the total compensation sought to $160.9 million, excluding interest.

“It’s not that much per individual farmer (if the suit is won),” Wells said. “It totally depends how many tonnes they (farmers) delivered to the pools in those two years, but that’s one of the reasons class actions were invented. It wouldn’t make sense for one or a very small group of farmers to take this sort of action, but it certainly makes sense to launch it as a class.”

Farmers who delivered to the pools in 2010-11 and 2011-12 are automatically part of the class action lawsuit unless they opt out, Wells said.

More information for affected farmers will be posted on a website, he added.

Wells doesn’t know when the case will be heard, but doesn’t rule out it taking another three to five years to resolve.

“They (federal government and G3) have been deliberately trying to delay this process all the way along for the last 10 years… but this is a very significant step toward getting the action certified having the representative plaintiff Andrew Dennis named in the action so he can carry it forward on behalf of all these farmers,” Wells said. “It’s a really crucial step. Without this the case couldn’t have gone anywhere.”

Wells declined to disclose how much money has been spent litigating the case so far.

“We have said all along that we are very grateful to all of the farmers that supported us when we started fundraising for this action back in very, very late 2011 and then in 2012, 2013 and 2014,” he added. ‘We wouldn’t have gotten anywhere without the support of those farmers there’s no question about that. This is truly the farmers’ action. Everybody is looking forward to the result.”

While the case is about the alleged misuse of farmers’ money, it’s also about holding government to account, Wells said.

“Cabinet, through orders-in-council, can change some things but they can never override the existing legislation,” he said. “And that’s what we are arguing happened here — that Ritz was overriding the original legislation with his orders-in-council, which in turn makes his actions illegal.

“Whether they (farmers) agreed with the wheat board being a (mandatory) marketing agency or not they still didn’t deserve to have money taken from the pooling accounts and just given to the King of Saudi Arabia and Bunge.”

After taking over the CWB, the new G3, renamed G3 Canada Ltd., was 50.1 per cent owned by SALIC and Bunge and up to 49.9 per cent potentially owned by farmers, depending on how much grain they delivered to the new firm.

Farmers were to earn $5 of G3 equity for every tonne.

G3 Canada had two shareholders — G3 Global Grain Group and the farmers’ equity trust. Farmers who deliver to CWB own units in the trust and the trust owns shares in G3 Canada Limited.

After the farmers’ equity is fully allocated, or in seven years (2022), G3 Canada Ltd. can buy the equity, but isn’t obliged to.

In 2016 Reuters reported SALIC’s ownership within G3 Global Grain Group jumped to 75 per cent from 49 per cent, according to an April 28, 2016 Bunge filing.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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The Winnipeg-based company announced Monday it will build new facilities at Rycroft, Alta. and Melfort, Sask., with construction starting later this year on both toward completion in early 2023.

The two elevators will each be built with 150-car loop track systems connecting to Canadian National Railway (CN) track, and will each include storage capacity for 42,000 tonnes of grain.

Other “high-efficiency features” will allow producers the ability to unload a Super-B truck in less than five minutes as well as “excellent” road access, the company said.

“G3 is keeping grain moving to market, and that means more delivery opportunities for our farmer customers, and faster service which saves farmers time and money,” G3 CEO Don Chapman said in the company’s release.

Other grain handlers with elevators at Melfort include Viterra, Richardson Pioneer and The Andersons, while Richardson, Parrish and Heimbecker, Cargill and Grain Millers Canada have facilities at Rycroft.

G3 has been on a relatively steady expansion track on the Prairies since its formation in 2015, today operating 17 Prairie grain elevators and five port terminals.

Those include elevators opened earlier this year at Vermilion, Alta. and Swift Current, Sask. In 2020 G3 opened five Alberta elevators, along with its West Coast port terminal at Vancouver. — Glacier FarmMedia Network

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The Manitoba Court of Appeal has overturned a lower court judge’s ruling to strike the suit.

The higher court on Wednesday “ruled that our cause of action — ‘malfeasance while in public office’ — is legitimate, and that our litigation against the federal government can continue,” Wells said Friday via email.

“The alleged offence occurred when Gerry Ritz was the minister of agriculture and the Canadian Wheat Board was being destroyed by the Harper government in 2011.”

The decision, Wells said, means “we can continue our legal process which calls for the repatriation of $150 million to farmers who were marketing wheat and barley through the CWB in 2010-11 and 2011-12. The legal action also calls for $10 million in punitive damages. With interest accruing since 2012 the total number would be in the $190 million range.”

In a phone interview, Wells said the Court of Appeal’s written ruling underscores the suit’s credibility.

“There is nothing on the record before this court to suggest that the allegations (in the suit) are bald conclusions, patently ridiculous or manifestly incapable of proof,” the Court of Appeal’s written ruling states in part.

It goes on to say the lower court judge’s decision to strike the suit “is so clearly wrong as to amount to an injustice.”

Wells said it’s unclear when the suit will go before a judge to be certified. If it is, farmers who did business with the CWB during those two crop years will be part of the action, unless they opt out.

Of the $151 million the suit claims should’ve gone to farmers who delivered to the CWB, it alleges $145.2 million ended up in the CWB’s contingency fund and $5.9 million was withdrawn from the CWB’s pool accounts. The allegations have not been tested in court.

The CWB set up a contingency fund to cover losses that occurred when farmers opted to price grain sales outside the CWB’s pools. It was funded when transactions earned more than the prices farmers at which farmers sold. The fund was meant to break even over time.

“In order to fund the transformation of the board to a privately held entity, the defendants engaged in a course of conduct intended to reduce payments to farmers who had sold and delivered grain to the board during the class period and to increase the monies in the contingency fund,” the claim alleges.

The federal CWB Act didn’t allow the wheat board to use money earned from its pool accounts for anything other than covering its operating expenses. Gerry Ritz, who was agriculture minister at the time, said the government would cover the costs of transitioning the CWB to an entity that could be acquired by a private company.

“Nevertheless, the board improperly charged $5.9 million in transition costs to the pool accounts, which reduced the amount that was available to producers upon payment of their contracts during the 2011-12 crop year,” the claim alleges.

“The plaintiff pleads that the board breached its duty of good faith to the class (farmers who delivered to the CWB) by ignoring its obligations to the producers, and by allocating money to the contingency fund that otherwise would have been paid to the pool account contract holders.”

The Conservative government ended the CWB’s single-desk marketing authority effective Aug. 1, 2012.

— Allan Dawson is a reporter with the Manitoba Co-operator at Miami, Man.

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Winnipeg-based G3 announced Wednesday its new 180,000-tonne capacity terminal at the Port of Vancouver is officially open, but the company has “set aside” plans for a ceremony to that effect, due to the COVID-19 pandemic.

During the commissioning process, the new facility has for “several months” been “safely and efficiently” taking in Prairie grain by rail and loading it onto ships, G3 said.

The terminal, served by Canadian National Railway (CN), can receive up to three 150-car trains on its loop track, a feature it described as “unique among grain exporting terminals in Canada.”

The system allows trains to unload while still in motion and return to G3 elevators without detaching from their locomotives, “which is critical to increasing supply chain efficiency.” It’s also expected to help address concerns that were aired about port congestion when the new terminal was first proposed.

The terminal’s dock can accept vessels up to capesize, and includes three ship loaders with a “new industry standard” vessel load rate of up to 6,500 tonnes per hour.

Work started on the facility at Burrard Inlet’s North Shore in March 2017, with a budgeted cost of over $500 million. When G3 announced its plans in late 2016, the terminal was billed as the first new grain facility to be built at the port in almost 50 years.

To feed the terminal, G3 has 13 primary elevators running on the Prairies, with four others under construction. By the end of 2021, the company expects to have nine elevators operating in Saskatchewan, six in Alberta and two in Manitoba.

The company, a joint venture between U.S. grain firm Bunge and Saudi-owned SALIC, also has port facilities at Thunder Bay, Hamilton, Quebec City and Trois-Rivieres. — Glacier FarmMedia Network

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The Winnipeg company announced Thursday it will start work in early 2020 on new grain elevators at Swift Current, Sask. and Vermilion, Alta. for completion in 2021.

Both new elevators are to be built with “high-efficiency features” including a loop track that can “quickly” load a 150-car unit train and capacity to unload a Super B truck in less than five minutes, the company said.

The Swift Current elevator is to be built on Canadian Pacific Railway (CP) track, with grain storage capacity of 42,000 tonnes, while the Vermilion facility will be built on Canadian National Railway (CN) track with capacity of 34,000 tonnes.

For a company that started 2018 with no Alberta elevators, Thursday’s announcement adds to a construction schedule that already includes five others in the province, at Wetaskiwin, Morinville, Carmangay and Irricana and near Erskine in Stettler County.

G3 also has a new Vancouver export terminal under construction and due to open next year.

G3 CEO Don Chapman said the company’s network “has been steadily growing to serve some of the most productive grain growing regions in Western Canada” and the two new sites will give farmers “fast and efficient option(s) for moving their grain to market.” — Glacier FarmMedia Network

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The Winnipeg company announced Wednesday it plans to start construction by this summer, pending regulatory approvals, on a pair of 42,000-tonne capacity elevators in the province, near Stettler and Irricana, for completion in 2020.

The Stettler County elevator is to be built near the Canadian Pacific Railway line just south of Erskine, about 10 km west of Stettler in east-central Alberta.

The Irricana elevator is to be built near the Canadian National Railway line about eight km south of the community, off Highway 9. Irricana is about 45 km northeast of Calgary.

Both elevators are to include a railway loop track which can accommodate a 150-car unit train and “will be able to unload a Super B truck in less than five minutes,” G3 said in a release.

The company during 2018 announced plans to build three Alberta elevators, near Morinville, Wetaskiwin and Carmangay, and another near Maidstone, Sask., southeast of Lloydminster, Alta.

The Wetaskiwin and Maidstone elevators are due to be open this year, followed by the Morinville and Carmangay elevators in 2020.

G3 — jointly owned by Bunge, Saudi Arabia’s state ag investment firm SALIC and Class B farmer-shareholders through the Farmers Equity Trust — has already built and opened several elevators in the Saskatchewan and Manitoba markets since 2013, when it was known as CWB.

“Central Alberta is one of the most important grain growing regions in Canada,” company CEO Don Chapman said in Wednesday’s release.

“We are excited to be able to provide farmers in the region a new choice to market their grain through modern facilities that will save them time and money.”

Other primary grain elevators in the Irricana area include the Louis Dreyfus site at Lyalta and Canada Malting’s facilities at Beiseker and Lyalta.

At Stettler, Viterra operates a smaller elevator but announced plans in November for a major expansion at that site. Other nearby facilities include the W.A. Grain elevator at Bashaw. — Glacier FarmMedia Network

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The Winnipeg company said Thursday it will start construction “shortly” at its chosen site just west of town, connecting to Canadian National Railway (CN) track on the north side of Highway 642.

The new elevator, which the company plans to complete in 2020, is expected to have storage capacity for 42,000 tonnes of grain and a loop track system to load 150-car trains under “continuous” motion.

The company said the new site will be “designed for speed and efficiency” with throughput capacity to unload incoming trucks in under five minutes.

The company — jointly owned by Bunge, Saudi Arabia’s state ag investment firm SALIC and Class B farmer-shareholders through the Farmers Equity Trust — has built and opened several elevators in the Saskatchewan and Manitoba markets since 2013, when it was known as CWB.

In Alberta, however, G3 concrete is only now under construction. The company in recent months announced it will have a new elevator next year at Wetaskiwin, about 100 km south of Morinville, and another in 2020 at Carmangay, about 60 km north of Lethbridge.

Another new G3 elevator is also under construction at Maidstone, Sask., about 55 km southeast of Lloydminster, for a 2019 opening.

The Morinville site will be “well placed” to move grain to G3’s export terminal at Vancouver when that facility opens, also expected in 2020, the company said.

Grain handling already at Morinville includes Westmor Terminals, part-owned by Richardson International. Westmor’s elevator, near G3’s planned site west of town, has concrete and steel bin capacity for 41,840 tonnes of grain.

The Morinville Municipal Seed Cleaning Co-op, on the south side of town, is also equipped for rail car and container loading. — Glacier FarmMedia Network

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