Shareholders of Canada’s largest grain handler, Viterra Inc. , on Tuesday voted overwhelmingly in favor of a friendly takeover bid by Swiss commodities trader Glencore International PLC, pushing the biggest deal in years for the global agriculture sector closer to reality.
The deal was supported by 99.8 per cent of shareholders, far more than the required two-thirds majority.
Glencore offered Viterra $16.25 (Canadian) per share, or $6.l-billion in March for the company, which owns the biggest share of Western Canada’s grain storage and farm supply outlets, as well as nearly all grain storage capacity in South Australia.
The acquisition, which still needs regulator approval in Canada and Australia, would bring Glencore into the big leagues of global agriculture, which are dominated by Archer Daniels Midland Co. , Bunge Ltd. , Cargill Inc. and Louis Dreyfus Corp., the so-called ABCD quartet of the industry.
Viterra is one of two major North American grain companies up for sale this year, with Japanese trading house Marubeni Corp. swooping in on Tuesday to buy U.S.-based Gavilon Group for $3.6-billion (U.S.).
Canada is the biggest exporter of canola, spring wheat and oats.
Glencore would get most of Viterra’s country and port grain storage in Western Canada, along with some food processing assets, and its grain storage and handling assets in South Australia.
Glencore has also cut side deals to sell some of Viterra’s assets to two Canadian companies, Agrium Inc. and Richardson International Ltd., in a move to win political support in Ottawa.
The end of the Canadian Wheat Board’s monopoly over Western Canada’s wheat and barley sales is expected to boost profits for grain handlers, who will be able to buy directly from farmers for the next harvest.
Viterra shares were down 2 cents (Canadian) at $16.01 in Toronto, suggesting that investors still see some risk that the deal may not be completed.
Glencore shares in London were up 2.4 per cent at 351.55 pence, while Agrium stock climbed 2.7 per cent to $81.95 in Toronto, little changed with their levels before the vote result.
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