China nod clears way for Glencore's Viterra purchase

Fri Dec 7, 2012 11:20am EST
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By Bhaswati Mukhopadhyay and Rod Nickel

(Reuters) - Glencore International Plc won approval from China's Ministry of Commerce on Friday for its C$6 billion ($6 billion) purchase of Canadian grain handler Viterra Inc, clearing the last regulatory hurdle for the long-delayed deal.

The takeover, one of the largest in the global agriculture industry in years, was originally expected to close by late July.

The deal will give Swiss-based Glencore, the world's largest diversified commodities trader, a huge presence in grains — an area dominated by Archer Daniels Midland Co, Cargill Inc and Bunge Ltd — complementing its strength in metals, minerals and oil.

After selling off some Viterra assets in side deals that still require Canadian regulator approval, Glencore and privately held Richardson International Ltd would be the leading grain handlers in Canada, the world's biggest producer of canola and sixth-largest wheat grower.

Richardson, which has agreed to buy some of Viterra's assets, and Glencore would each own about one-third of Western Canada's grain-handling capacity. The companies would be roughly the same size.

Viterra also owns almost all of the grain storage and handling system in South Australia, which produces about 15 percent of the crops grown in Australia.

Viterra, whose only significant asset in China is a joint venture canola-crushing plant, said on Friday it expects the deal to be finalized on December 17. It was originally expected to close by late July.

There had been speculation that China was holding off on a decision until it found out if the Canadian government would approve a takeover of Canadian oil producer Nexen Inc by China's CNOOC Ltd.   Continued...

The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar November 20, 2012. REUTERS/Arnd Wiegmann