Canadian Competition Bureau Raises Concerns Over Bunge-Viterra Agriculture Merger

In its formal report to Ottawa, the bureau highlighted concerns about the deal's impact on competition for grain purchasing in Western Canada and the sale of canola oil in Eastern Canada. The merger, if approved, could result in a substantial loss of rivalry between Viterra and Bunge, affecting the agricultural landscape in Canada.

While Bunge and Viterra disputed the bureau's findings, stating that the concerns were misplaced, the Canadian government will ultimately make the final decision on the merger. The transport ministry has until June 2 to review the deal, with the cabinet expected to identify any overlapping competition and transportation concerns and request remedies from the companies.

The merger's potential effects on competition have raised alarms among farm groups in Saskatchewan, who fear a reduction in market competition and facility closures. Additionally, the bureau noted Bunge's influence over Saudi-owned G3, a competitor to Viterra, due to its minority shareholder status.

If approved, the merger would consolidate a significant portion of Western Canada's elevator capacity under Bunge, Viterra, and G3, raising further concerns about market dominance. While Bunge and Viterra remain optimistic about the deal's benefits to Canada, analysts anticipate at least a slight delay in the merger process due to Canada's objections.

Investors will closely monitor developments on the merger, with Bunge scheduled to discuss quarterly results on Wednesday. Despite the regulatory hurdles, Bunge shares experienced only a slight decline following the release of Canada's report.