Glencore would divide Viterra in 3 parts: source

Fri Mar 16, 2012 3:48pm EDT
 
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By Victoria Howley and Rod Nickel

LONDON/WINNIPEG, Manitoba (Reuters) - Glencore GLEN.L would carve up Viterra VT.TO into three pieces if it wins a bidding war for Canada's largest grain handler, an industry source said on Friday, describing the Swiss trader's plan for navigating the government scrutiny that a foreign takeover would face.

The source told Reuters the commodity trading giant wanted to buy all of Viterra and then sell its retail business to Agrium, a Canadian fertilizer producer.

Richardson International, a closely held Canadian grain trader, would take Viterra's food processing unit in a rare and complex deal known as "back-to-back" transaction.

Earlier reports said Glencore, also bidding for mining group Xstrata XTA.L, was planning a joint offer with Agrium and Richardson, something that might help the Swiss-based trader get round Canadian concerns about a sale to a foreign entity.

As the second-largest Canadian grain handler, Richardson would likely also be interested in some grain elevator and port assets.

Viterra, based in Regina, Saskatchewan, said Thursday it had established a process for potential buyers, and its stock rose 10 percent.

MONOPOLY ENDING

Viterra stands to profit from a government decision to end the Canadian Wheat Board's monopoly on Western Canadian wheat and barley sale. A successful bidder would win access to Canada's high-quality canola, spring wheat, oats and durum wheat supplies. Canada, the world's No. 8 grains producer, is the leading exporter of each crop.   Continued...

 
Swiss commodities trader Glencore's logo is seen in front of its headquarters in Baar, near Zurich, February 6, 2012. REUTERS/Romina Amato