Viterra in exclusive sale talks with Glencore: source

Mon Mar 19, 2012 9:31pm EDT
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By Rod Nickel and Michael Erman

WINNIPEG, Manitoba/NEW YORK (Reuters) - Commodities giant Glencore (GLEN.L: Quote), partnered with Canada's Richardson International Ltd and Agrium Inc (AGU.TO: Quote), is close to a deal to buy Viterra Inc VT.TO, Canada's biggest grain handler, a source familiar with the matter told Reuters.

Viterra and Swiss-based commodities trader Glencore are still in talks on price, but a deal could be reached within the next 24 hours at a price above C$16 per share, said the source, who could not speak publicly because discussions are ongoing.

At C$16 a share, Viterra's market value would be about C$5.9 billion ($5.95 billion).

Viterra VT.TO said on Monday it was in exclusive talks with one prospective buyer, but it did not identify the suitor.

"I guess they've picked a winner from the bid process and now they're hammering out the details of the bid," said Jason Zandberg, an analyst at PI Financial Corp, who follows Viterra.

In Viterra, Glencore and its partners would acquire the leading Canadian handler of spring wheat, canola, barley and oats, just as the Canadian Wheat Board's monopoly on Western Canadian wheat and barley is slated to end later this year. Viterra also holds a dominant grain-handling position in South Australia.

A rapidly growing global population and rising middle class in some developing countries are expected to drive demand for grains higher over the long term, making major grain handlers and food processors such as Viterra more important.

Canada is the world's No. 8 grain producer.   Continued...

Viterra Inc CEO Mayo Schmidt speaks during the Reuters Food and Agriculture Summit in Chicago March 16, 2011. REUTERS/John Gress