Approvals all in for Glencore’s Viterra takeover

Approvals all in for Glencore’s Viterra takeover

China’s commerce ministry has granted the last blessing needed for a Swiss commodity giant’s takeover of Canada’s largest grain company.

Glencore International on Friday announced it has received notice from China’s commerce ministry (MOFCOM) that its proposed $6.1 billion acquisition of Viterra “has been approved.”

The “waiting period” for MOFCOM to approve or reject Glencore’s proposed takeover of Viterra was to expire Sunday (Dec. 9). Viterra’s Chinese assets include a joint-venture stake in a canola crushing facility in Fangchenggang, a trading office in Shanghai and a representative’s office in Beijing.

Authorities and courts in Canada, the U.S., Australia and all other nations where Viterra operates have long since granted their blessings, or at least their official indifference, to the deal.

Glencore said Friday it now expects its takeover to take formal effect on Dec. 17 — on which date all Viterra shareholders will receive their promised payment at a rate of C$16.25 per share.

Glencore said it will also make the “necessary arrangements” to have Regina-based Viterra delisted from the Toronto Stock Exchange (TSX) and Australian Securities Exchange (ASX).

Viterra said its CHESS depositary interests (CDIs) are expected to halt trading on the ASX on Dec. 11, and it will no longer be possible to convert CDIs to common shares, or common shares to CDIs, effective when the ASX opens for trading on Dec. 14.

“The approvals over the past months by the Canadian courts, regulators around the world and our shareholders, who voted 99.8 per cent in favour of the deal, demonstrate widespread support for this transaction,” outgoing Viterra CEO Mayo Schmidt said in a separate release.

“I wish Viterra employees and Glencore continued success in the Canadian and Australian agricultural landscape.”

Some investors are reported to have speculated that China had been holding off on its Viterra decision until it learned whether the Canadian government would approve a $15.1 billion proposal from China’s CNOOC for Calgary-based oil company Nexen.

Canada’s industry ministry approved the Nexen deal later Friday, but that deal, as of last week, also awaits approval not only from authorities in China, but from the U.S. and European Union.

Glencore’s deal for Viterra isn’t yet finished changing the Prairie ag landscape. The Swiss firm had made two side deals to sell Viterra assets to fertilizer and ag retail giant Agrium and to the No. 2 Canadian grain handler, Richardson International.

Calgary’s Agrium is to buy about 90 per cent of Viterra’s ag retail facilities across Canada for about $915 million.

Richardson, meanwhile, will put up over $900 million to buy 19 Viterra grain elevators and their attached crop input dealerships; Viterra’s 25 per cent stake in the Cascadia grain terminal at Vancouver; a Viterra port terminal at Thunder Bay, Ont.; Viterra’s Can-Oat Milling, including processing plants at Portage la Prairie, Man., Martensville, Sask. and Barrhead, Alta.; and Viterra’s 21st Century Grain Processing business, including an oat processing plant at South Sioux City, Nebraska and a wheat mill at Dawn, Texas.

The Agrium and Richardson deals with Glencore still require approvals from Canada’s Competition Bureau.

CORRECTION, Dec. 20, 2012: A previous version of this article stated Agrium still planned to buy Viterra’s minority stake in a nitrogen fertilizer plant at Medicine Hat, Alta. as part of a $1.15 billion package of Viterra assets. Agrium gave up its claim on the fertilizer plant stake in August and Glencore now plans to sell the minority share to CF Industries for $175 million. We regret the error.

Related stories:
Glencore’s Viterra takeover wins federal government blessing, July 15, 2012
Glencore confirmed as Viterra’s six billion dollar suitor, March 20, 2012

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