Prairie farmers, stakeholders and communities want to know how and why the proposed Bunge-Viterra merger would be good for Canada.
We’ve listened to your concerns and answered your questions, but I want you to hear the answers directly from me.
The new company will be committed to Canadian workers and the transaction will not result in the closure of any Bunge or Viterra facilities in Canada. That commitment means we are keeping our important office presence in Regina and will continue to employ thousands of Canadians with well-paying jobs across the country.
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In keeping with this commitment, we’ve announced that current Viterra North America chief executive officer Kyle Jeworski will lead the combined company’s Canadian operations and will remain in Regina. Kyle has a deep connection to Canadian farmers, a proven track record of leading great teams and a history of working closely with Canadian producers and communities.
Simply put, this combination represents a major, multibillion-dollar investment in the future of Saskatchewan, as well as Canada, and their rightful place in the global agricultural industry.
We disagree with the findings of a March 27 report from three academics at the University of Saskatchewan. They acknowledge their work is based on assumptions and incomplete data, which they refuse to share. Using that flawed foundation, the report makes numerous unfounded and erroneous economic claims about the supposed negative impact of the proposed transaction.
For example, the authors state: “the model is used to simulate the Bunge-Viterra merger by assuming that the merged enterprise will operate the G3 (Bunge) and Viterra grain export elevator capacities as a single firm. The latter requires a minor behavioural assumption.”
This “minor behavioural assumption” is foundational to the report’s conclusions — and it is objectively false. It would violate G3s fiduciary obligations to its shareholders and likely violate Canadian competition law. It simply doesn’t make sense, and it’s plain wrong.
The truth is, G3 and Viterra are competitors today and G3 will be a strong competitor to a combined Bunge-Viterra after the merger.
The combination of Bunge and Viterra will compete with dozens of grain handling companies that operate hundreds of elevators and numerous terminals in Western and Eastern Canada.
We’ll continue to buy the same crops as we do today and help Canadian farmers export more of their products to more places around the world, keeping Canada at the forefront of a competitive agricultural industry where success is increasingly defined by global reach. We’ll provide Canadian producers with more certainty and economic security by increasing resilience to supply chain disruptions.
We are working closely with the Canadian government authorities who are examining this transaction as part of their regular and rigorous review process to address any concerns and to highlight the benefits that Saskatchewan and Canada will gain from the combined company.
As for the University of Saskatchewan academics’ report, it flies in the face of both history and market reality, where we are now seeing unprecedented growth in canola demand. It appears to place no faith in the competitive ability and dynamism of Western Canada’s farm producers and the grain handling and processing sectors.
The history speaks for itself. In 2007, Viterra was created, and Saskatchewan’s gross domestic product increased nearly $3.2 billion the next year, with agricultural GDP increasing by more than $1.3 billion.
In 2012, Glencore acquired Viterra, and the following year Saskatchewan’s GDP increased by more than $4.4 billion, with agricultural GDP rising by nearly $2.2 billion.
Since 2007, farm crop receipts in Saskatchewan have increased by more than 228 percent. We can debate the trends of a globalizing agricultural market, but Saskatchewan and Canada are clearly in a position to thrive.
A combined Bunge and Viterra will only fuel this growth. We can’t wait to get started.
Gregory Heckman is chief executive officer of Bunge.
