Bunge Global SA BG-N has sold five grain elevators and appointed new directors as it works to fulfill competition agreements made with the federal government after the recent Viterra Ltd. acquisition.
The divested elevators are located in Dixon, Sask., and Fannystelle, Beausejour, Tucker, and Coulter, Man. They will be sold to local companies, including Direct Grain Limited, Linear Grain Inc. and BP & Sons Grain.
The transaction is part of the divestiture commitment Bunge made with Ottawa as part of its merger with Viterra.
The deal between Bunge and Viterra was a transaction between the company in Western Canada with the most oilseed-crushing facilities (Bunge) and the company with the most primary grain elevators (Viterra). The Competition Bureau said the merger was likely to result in significantly less competition in Canadian agricultural markets.
Bunge must sell one more grain elevator. A tentative agreement is in place to divest itself of Valparaiso, Sask., said a company statement Friday. The deal is subject to approval by the Minister of Transport.
As part of the agreement, Bunge must also replace its representatives on the board of G3 group of companies.
The Competition Bureau took issue with Bunge’s 25-per-cent stake in G3 group of companies, and therefore Bunge’s ability to access competitively sensitive information and influence G3’s behaviour. G3 owns and operates the grain-export terminal in Vancouver as well as grain elevators across the country. The remaining 75-per-cent stake in G3 is held by the Saudi Agricultural and Livestock Investment Company.
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Bunge was to replace these directors 120 days after completing the transaction. The deadline was Oct. 31. Federal corporate filings obtained by The Globe and Mail show that the new appointments are Mark Stonacek and Richard McLellan, U.S. residents located in New Mexico and Florida, respectively.
The new directors will be compensated by Bunge at market rate. These directors were identified by a reputable executive search firm and approved by a monitor, who also reported to the Minister of Transport, according to statements Transport Canada sent to The Globe. Bunge also compensated the monitor, according to the Competition Bureau.
Other conditions of the merger mandate that Bunge limit price-control commitments for grain in select areas, retain Viterra’s head office in Regina for five years and invest at least $520-million in Canada across that time frame.
Bunge has also divested its Eyebrow, Sask., grain elevator to F.W. Cobs, said the company statement Friday. These divestments are not part of the company’s commitments to the government.
Bunge has also been moving to expand its presence across Western Canada. In late September, it purchased North West Terminal (NWT) in Unity, Sask., one of the largest grain elevators in the country. The facility had been offline for a year. The site’s storage capacity equalled 63,000 metric tonnes.