Shareholders back Glencore takeover of Viterra

Tue May 29, 2012 3:02pm EDT
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By Scott Haggett and Rod Nickel

CALGARY, Alberta/WINNIPEG, Manitoba (Reuters) - Shareholders of Canada's largest grain handler, Viterra Inc VT.TO, voted overwhelmingly on Tuesday in favor of a friendly takeover bid by Swiss commodities trader Glencore International Plc (GLEN.L: Quote), pushing the biggest deal in years for the global agricultural sector closer to reality.

The deal was supported by 99.8 percent of shareholders, far more than the required two-thirds majority.

Glencore offered Viterra C$16.25 per share, or C$6.l billion ($5.9 billion) in March for the company, which owns the biggest share of Western Canada's grain storage and farm supply outlets, as well as nearly all grain storage capacity in South Australia.

The acquisition, which still needs approval by regulators in Canada and Australia, would bring Glencore into the big leagues of agriculture, which are dominated by Archer Daniels Midland Co (ADM.N: Quote), Bunge Ltd (BG.N: Quote), Cargill Inc CARG.UL and Louis Dreyfus Corp LOUDR.UL, the so-called ABCD quartet of the industry.

In Canada and Australia, where Viterra is strong, "ADM, Bunge and Cargill will take notice of Glencore," said Horst Hueniken, a former analyst based in Toronto who is working to launch a global agricultural hedge fund.

"The other concern will be that Glencore will continue to grow and start penetrating markets beyond Canada, parts of the U.S. and Australia," he said.

Glencore's move comes in one of the busiest merger and acquisition periods for agriculture since the late 1990s as improving diets and incomes in countries like China and India stoke interest in grain companies. Japanese trading house Marubeni Corp (8002.T: Quote) on Tuesday swooped in to buy U.S.-based Gavilon Group for $3.6 billion.

The growing use of corn and other crops to make biofuels has tightened supplies of food crops, Hueniken said, making agriculture a likely space for further deal activity.   Continued...

The logo of Glencore is seen in front of the company's headquarters in the Swiss town of Zug May 9, 2012. REUTERS/Arnd Wiegmann