REGINA - Grain-handling company Viterra Inc. has agreed to be acquired by Switzerland-based Glencore International in a $6.1-billion deal that will see two Canadian partners pick up major parts of the business.
Calgary-based Agrium Inc. (TSX:AGU) and Richardson International, based in Winnipeg, will buy the majority of Viterra's Canadian assets for $2.6 billion in cash.
Part of the agreement includes keeping Viterra's North American head office in Regina.
"The acquisition of Viterra reflects our strong belief in the importance and future potential of the Canadian and Australian grain markets," said Chris Mahoney, director of agricultural products at Glencore which has agreed to pay $16.25 per share for the company.
Under the agreement, Agrium will pay $1.8 billion to buy the majority of Viterra's retail agriproducts business including its 34 per cent interest in Canadian Fertilizer Ltd.
"We believe our crop production services retail business can provide significant value for Canadian farmers and that it provides an opportunity for growth in a market where we currently have a limited retail presence," Agrium president and CEO Mike Wilson said in a statement.
"The transaction is an excellent fit with Agrium's stated strategy of growing across the value chain by expanding both our retail and wholesale operations."
Richardson International will pay $800,000 for 23 per cent of Viterra's Canadian grain handling assets, as well as certain agricentres and processing assets in North America.
"Our agreement with Glencore will enhance both our grain handling and processing capacities, and help meet the growing needs of farmers in Western Canada," said added Curt Vossen, president of Richardson International.
The takeover offer comes as the company is poised to benefit from the end of the Canadian Wheat Board's monopoly on the marketing of wheat and barley in Western Canada.
Viterra, formed by the merger of the Saskatchewan Wheat Pool and Agricore United, is a grain handler, marketer and food processor with operations across Canada, the United States, Australia, New Zealand and China.
The transaction will require approval by two-thirds of the votes cast at a meeting of Viterra shareholders expected to be held in May.
Alberta Investment Management Corp., Viterra's largest shareholder with a roughly 16 per cent stake or about 60 million shares, as well as Viterra's directors and senior executives have agreed to support the deal.
If the deal does not close for regulator reasons, Glencore has agreed to pay Viterra $50 million.
Shares of Viterra slipped eight cents to $15.89 on the Toronto Stock Exchange shortly after markets opened.
