Glencore International’s proposed $6.1 billion takeover of Viterra, Canada’s largest grain handling company, may not take place until mid-November.
Viterra officials said this week that the Glencore-Viterra deal is still waiting for regulatory approval from China’s Ministry of Commerce (MOFCOM).
MOFCOM approval is the last regulatory approval required before the deal can proceed.
“Glencore and Viterra continue to engage with MOFCOM to ensure approval as soon as possible,” Viterra said in a Sept 26 news release.
“In order to accommodate MOFCOM’s review process, Viterra and Glencore have extended the outside date for completion of the acquisition by one month to November 15, 2012. MOFCOM is expected to provide its approval within this time frame.”
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Officials at Glencore and Viterra had originally hoped their deal would be finalized by July 31.
But regulatory hurdles have delayed the deal.
In late August, company officials said MOFCOM’s regulatory approval process was taking longer than expected and would continue into September.
Viterra now says Chinese approvals may not be in place until mid-November.
Viterra reached an agreement in March 2012 to sell its global assets to Glencore for approximately $6.1 billion.
As part of the deal, Glencore has promised:
• to maintain Viterra’s head office in Regina and make it the headquarters for Glencore’s North American operations
• to increase Viterra’s projected capital expenditures in Canada by more than $100 million over five years
• to invest an additional $8 million in research and development initiatives, over and above Viterra’s projected expenditures
• to contribute toward unspecified grain industry initiatives in Manitoba
• to increase contributions by 25 percent toward programs that support the western Canadian farm community
• to make charitable contributions in support of youth and to provide scholarships to First Nations and Métis students
• to work with the government of Saskatchewan toward the development of a Global Institute for Food Security and contribute to the project should the province initiate it
Approval of the Glencore-Viterra deal is required before regulatory agencies can begin reviewing two other proposed deals that would see Glencore sell a significant portion of its newly acquired Viterra assets to Agrium and Richardson International.
Under its deal with Glencore, Richardson would acquire 19 western Canadian elevators that are currently owned by Viterra, as well as a 25 percent ownership stake in the Cascadia Terminal in Vancouver, full ownership of a Viterra terminal in Thunder Bay, Ont., all assets of Can-Oat Milling, which has oat processing facilities in Saskatchewan, Alberta and Manitoba, and full ownership 21st Century Grain Processing, which has oat and wheat milling facilities in Nebraska and Texas.
Agrium, meanwhile, would acquire from Glencore 232 farm retail outlets in Canada and a handful of farm retail outlets in Australia.
Mike Wilson, chief executive officer of Agrium, said earlier this month that he expects Agrium to take possession of Viterra’s farm retail assets in late 2012 or early 2013.
