Bunge on Thursday announced the results of an extraordinary general meeting of shareholders, in which they approved the acquisition of Viterra and a related issue of about 65.6 million Bunge common shares.

As outlined when the proposed deal was announced in June, Bunge’s deal would see Viterra shareholders receive that amount of Bunge common shares, valued at about US$6.2 billion, plus about US$2 billion cash. Ultimately Viterra shareholders would own about 33 per cent of the merged company, after a related share repurchase plan is complete.

Bunge shareholder approval was among the “closing conditions” the company must meet, as well as regulatory approvals from several countries, to close the deal as planned in mid-2024. The company reiterated Thursday the merger is still expected to close at that time.

According to a separate filing Thursday with the U.S. Securities and Exchange Commission, that vote ran about 117.85 million Bunge shares in favour to 1.25 million against, with 355,464 shares abstaining.

“We appreciate our shareholders’ vote of confidence in our strategy to position Bunge as a premier global agribusiness solutions company through the merger with Viterra,” Bunge CEO Greg Heckman said Thursday in a release.

“Our team is focused on effectively running our operations while also planning for a successful integration.”

Among the regulatory approvals pending, Canada’s federal transport ministry and Competition Bureau have both said they have the proposed Bunge/Viterra combination under review.

Several Canadian farmer groups are pressing for further government interventions. The National Farmers Union in June called for the federal government to instead “make a counter-offer to purchase Viterra and return its assets to the control of Canadian farmers and workers through a new co-operative.”

Citing concerns over competition and market consolidation, Saskatchewan grain grower groups including the Agricultural Producers Association of Saskatchewan (APAS), SaskCanola, Sask Wheat and SaskBarley last week jointly called on that province’s government to run a separate risk assessment of the deal.

While now headquartered in Rotterdam in the Netherlands, Viterra’s roots are sunk deep in Western Canada, having formed from the 2007 merger of Saskatchewan Wheat Pool with Agricore United, the latter firm being a merger of the combined Manitoba and Alberta pools with United Grain Growers.

Regina-based Viterra went international in 2009 with a deal for Australia’s ABB Grain, then was majority-acquired by commodity firm Glencore in 2012, becoming Glencore Agriculture before rebranding as Viterra internationally in 2020.

The deal is likely to face close regulatory scrutiny in Canada, given Viterra’s significant stakes in Prairie grain handling, oilseed crushing and port terminal capacity — along with Bunge’s stakes in Canadian crushing and its part-ownership of Prairie grain handler G3.

Bunge’s shareholder meeting on Thursday also saw a separate vote, by a similarly wide margin, to approve a plan to change the place of incorporation and residence of the Bunge Group’s parent company from Bermuda to Switzerland.

That plan, Bunge said, also remains “subject to various conditions” including approval from the Supreme Court of Bermuda. — Glacier FarmMedia Network

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Transport Minister Pablo Rodriguez announced Tuesday that his department will review the deal under the mergers and acquisitions provisions of the Canada Transportation Act, starting with a “public interest assessment” which can run up to 250 days — that is, until June 2, 2024 at the latest.

The deal is “of significant national interest in Canada’s transportation sector and the broader supply chain,” he said, as both companies hold ownership interests in port terminals across the country.

“Healthy competition in the transportation sector is necessary to ensure fair pricing and access for users, especially for Canadian farmers,” he said.

The public interest assessment, he said, will include consultations with Canada’s ports and marine industry as well as other industry stakeholders, government departments and other levels of government, as well as Canadians generally.

Such an assessment is required under the Transportation Act, which says the minister must assess whether a proposed transaction involving a “federal transportation undertaking” raises issues of the public interest in national transportation.

The public interest, from the Act’s perspective, is “a broad concept” and individual transactions may raise different public interest issues or concerns, depending on each deal’s “unique facts and context.”

If, during the minister’s assessment, the deal is shown to raise public interest issues, the Canadian Transportation Agency or any other appointed person can then be tasked with further examining those specific issues.

Bunge’s assets in Canada include oilseed crushing operations and part-ownership, with a Saudi state-owned grain firm, in Prairie grain handler G3.

G3, created in 2015 with the assets of the privatized Canadian Wheat Board, today has port grain terminals at Vancouver, Thunder Bay, Hamilton, Trois-Rivieres and Quebec City as well as a network of 19 Prairie grain elevators.

Viterra, meanwhile, has its Cascadia and Pacific terminals at Vancouver plus terminals at Prince Rupert and Montreal and two at Thunder Bay plus a substantial grain elevator network.

Transport Canada’s review is independent of a review by the federal Competition Bureau, which in June said it will also review the deal. That review also has yet to be completed.

According to Transport Canada’s review guidelines, potential impacts on prices and access to services and facilities are “of prime interest” in any deal that involves a transport undertaking.

“In fully competitive markets these issues will be of lesser concern,” the department says, while “in markets characterized by less competition, such impacts may take on a higher level of significance.”

Other impacts to be considered in such a review could include the “financial viability of the entity resulting from the merger or acquisition” as well as “whether a transaction may adversely affect one or more transportation sectors.”

For its part, Bunge last month announced it has scheduled an “extraordinary general meeting” of its shareholders, to be held virtually on Oct. 5, to approve the acquisition of Viterra.

Bunge said in June it expects to close the merger of the two firms by mid-2024, pending approvals from regulators in countries where the companies operate, and approval from Bunge shareholders.

Separately, the Oct. 5 meeting will seek approval to move Bunge’s “place of incorporation and residence of the ultimate parent company,” to Switzerland from Bermuda. — Glacier FarmMedia Network

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After meeting with Liberal Party legislators in London, Ont., Trudeau said the government asked the executives of the five largest grocery chains, including Loblaw, Sobeys and Metro, to come to Ottawa next week to explain how they will stabilize prices. The five companies, representing 80 per cent of the Canadian grocery market, have until Oct. 9 to come up with a proposal.

“If their plan doesn’t provide real relief … we will take further action and we are not ruling anything out, including tax measures,” Trudeau said.

“It does not make sense in a country like Canada that our largest grocery chains should be making record profits while Canadians are struggling to put food on the table.”

In 2022, Canada’s three largest grocers — Loblaw, Sobeys, and Metro — collectively reported more than $100 billion in sales and earned more than $3.6 billion in profit.

Trudeau, who is under pressure over a lack of affordable housing, said his government will remove the federal five per cent sales tax on the construction of new rental apartment buildings.

“There are many developers and builders that are not moving forward with building new apartments because the costs are simply too high,” Trudeau said, adding the measure will lead to the creation of many new apartment buildings.

Trudeau’s minority government is propped up by left-leaning New Democrats and a federal election is only due in 2025. But opinion polls show the main opposition Conservatives, who accuse Trudeau of driving inflation through high government spending, would win power and end eight years of Liberal rule if an election were held now.

Boosting competition

Several grocery executives denied profiteering charges in a parliamentary committee earlier this year. But the lack of competition in the grocery sector has also irked the federal competition watchdog, and in June, it said more players were crucial to combat soaring prices of essential goods.

Trudeau waded into that debate on Thursday and said his government will remove provisions in competition laws that companies use to defend big mergers, saying cost savings outweigh negative impacts on competition.

Soaring food prices have been a concern for European governments as well and in March the French government reached a deal with the country’s main supermarket chains to help shoppers cope with food prices.

But the Retail Council of Canada pushed back against Trudeau’s claims and blamed the surging prices on food manufacturers and producers passing on higher costs to the grocers.

The association’s spokesperson Michelle Wasylyshen said any “credible discussion” on restoring prices must include food processors, manufacturers and other relevant businesses within the supply chain.

Sobeys and Walmart Canada had no immediate comment, while Metro declined comment. Loblaw said the company was “always open to discussions about what more can be done across the industry.”

In July, Trudeau shuffled much of his cabinet to focus on issues like a housing shortage and the rising cost of living and on Thursday he reiterated that he had no plan to quit.

Conservative leader Pierre Poilievre on Thursday again blamed the housing crisis on Trudeau, and said he would introduce his own plan to get homes built to parliament when it reconvenes next week after the summer break.

— Reporting for Reuters by David Ljunggren and Steve Scherer; additional reporting by Deborah Sophia in Bangalore; writing by Denny Thomas.

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Price rises for store-bought food have been outpacing the broader annual inflation rate for 10 consecutive months, and grew 11.4 per cent in September, the fastest pace in over four decades, according to Statistics Canada.

“With inflation on the rise, Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries,” the Competition Bureau said in a statement.

Canada’s opposition New Democrats (NDP), who have a deal to keep Prime Minister Justin Trudeau’s minority government in power until 2025, have been calling out grocery chain operators for high food prices.

Last week, the House of Commons supported an NDP proposal asking the government to make grocery store operators more accountable and impose tougher penalties for price-fixing and stronger competition laws.

The Competition Bureau said it would study whether competition factors were impacting the price of food — on top of other factors including Russia’s invasion of Ukraine and supply chain disruptions — but it was not investigating specific allegations of wrongdoing.

Results from the study are expected to be released in June. The bureau also opened up an eight-week public comment period on the matter, for which it will accept submissions until Dec. 16.

The watchdog said the grocery industry was complex and it might not have enough information to draw firm conclusions, but it expected to recommend measures that governments could take to help to improve competition.

Grocery chain operator Loblaw Cos., which reported a quarterly profit of $387 million on $12.85 billion revenue in July, said last week it was freezing prices of some 1,500 products of its in-store “no-name” brand until the end of January.

“Clearly, the rich CEOs of big grocery stores can reduce food costs for Canadian families,” the federal NDP said in a release last week following Loblaw’s announcement.

— Reporting for Reuters by Ismail Shakil in Ottawa. Includes files from Glacier FarmMedia Network staff.

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Under the deal, which was announced last August, Sanderson is being combined with Continental Grain subsidiary Wayne Farms. Sanderson will cease trading on Friday.

The new business, to be called Wayne-Sanderson Farms, will be headquartered at Oakwood, Ga., northeast of Atlanta, and will be led by Wayne Farms CEO Clint Rivers.

Any outstanding issues with the Justice Department were resolved prior to close, according to a person familiar with the matter.

The deal had raised concerns on Capitol Hill, where lawmakers asked for the Justice Department to take a hard look at it because of fear of pushing up prices.

The Justice Department, which had been investigating the deal for antitrust concerns, declined comment.

Chicken wings and breasts have climbed 38 and 24 per cent since February year-over-year, respectively, according to research from Wells Fargo.

The Biden administration, concerned about price hikes in general and especially in the meat sector, announced in January that it would spend US$1 billion and issue new rules as a way to address a lack of “meaningful competition” in meat processing.

— Reporting for Reuters by Diane Bartz. Includes files from Glacier FarmMedia Network staff.

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“It is very important, very vital, and very urgent that we hear the perspectives from the CEOs at these companies and get the full picture of why prices have gone up for consumers and down for ranchers,” Scott, a Democrat from Georgia, said in a statement.

“In addition to this panel of CEOs, we will be convening a panel of ranchers to hear what consolidation in the beef industry has done to their bottom lines and viability,” he added.

Increased prices and profits for meatpacking companies have threatened to amplify Washington’s scrutiny of the U.S. meatpacking industry, as the Biden administration has criticized a lack of competition in the sector.

U.S. President Joe Biden announced a plan in January for new rules to bolster competition and stop “exploitation” in the sector amid concerns that a small group of meat packers was capable of dictating beef, pork and poultry prices, adding to inflation pressures caused by rising labour and transportation costs and by COVID 19-related supply constraints.

In January, the chairman of the House of Representatives subcommittee on economic and consumer policy sent a letter to major U.S. meat processing companies, seeking information on rising prices and profits.

— Reporting for Reuters by Kanishka Singh in Washington, D.C.

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The inquiry stems from the Biden administration’s July 2021 executive order to promote competition across the U.S. economy, the agency said in a release Friday.

Global supply chain problems and inflation have sent fertilizer and other farm input prices soaring, limiting farmers’ ability to capitalize on decade-high grain prices. Fertilizer is expected to be even more scarce as global markets shun Russia, a fertilizer exporter to North and South America, following its Feb. 24 invasion of Ukraine.

“Concentrated market structures and potentially anticompetitive practices leave America’s farmers, businesses, and consumers facing higher costs, fewer choices and less control about where to buy and sell, and reduced innovation — ultimately making it harder for those who grow our food to survive,’ Agriculture Secretary Tom Vilsack said in the release.

Vilsack said in February that he hoped that fertilizer and agricultural input supply companies would not take advantage of the crisis in Ukraine to push already high prices higher.

The Iowa attorney general’s office is also investigating high fertilizer prices. Prices for urea and potash are up more than 200 per cent since January 2021 and liquid nitrogen is up 290 per cent, the office said in February.

USDA will collect comments for 60 days.

The Department also announced a US$250 million grant to support “independent, innovative and sustainable American fertilizer production.”

— Leah Douglas reports on U.S. agriculture and energy policy for Reuters from Washington, D.C.

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The preliminary settlement by the Brazilian company and its U.S. units with so-called direct purchasers was disclosed on Tuesday, and is the first in nationwide antitrust litigation over beef price-fixing.

Lawyers for the purchasers called the accord an “icebreaker” and an excellent recovery, citing JBS’ $24.5 million settlement in 2020 of price-fixing claims by pork purchasers (all figures US$).

In a statement, JBS said it did not admit liability but that settling was in its best interest. It also said it will defend against beef price-fixing claims by other plaintiffs.

The accord requires approval by Chief Judge John Tunheim of the federal court in Minneapolis. Other defendants include Cargill, National Beef Packing Co. and Tyson Foods.

JBS settled one month after U.S. President Joe Biden announced a plan for new rules to bolster competition and stop “exploitation” in the meat sector.

Biden spoke amid concern that a small group of meat packers were capable of dictating beef, pork and poultry prices, adding to inflation pressures caused by rising labour and transportation costs and by COVID-19-related supply constraints.

In their lawsuit, direct purchasers accused the defendants, which controlled an estimated 80 per cent of U.S. fresh and frozen beef supply, of conspiring since 2015 to reduce slaughter volumes, creating a shortfall that smaller companies could not make up.

Commercial beef purchasers and consumers have brought similar lawsuits. Cattle producers also sued, claiming they were paid less than they would have received in a competitive market.

Tunheim also handles litigation concerning the alleged fixing of pork prices. A Chicago federal judge handles litigation concerning the alleged fixing of broiler chicken prices.

— Jonathan Stempel is a Reuters correspondent covering U.S. courts and regulators from New York; additional reporting by Tom Polansek.

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The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the U.S. meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers.

“Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said. “That’s what we’re seeing in meat and poultry industries now.”

A recent White House analysis found that the top four meatpacker companies — Cargill, Tyson Foods, JBS and National Beef Packing Co. — control between 55 and 85 per cent of the market in the hog, cattle, and chicken sectors.

The U.S. Department of Agriculture (USDA) will spend the US$1 billion from American Rescue Plan funds to expand the independent meat processing sector, including funds for financing grants, guaranteed loans, and worker training, said Agriculture Secretary Tom Vilsack, who was speaking at an event with Biden.

USDA will also propose rules this year to strengthen enforcement of the Packers and Stockyards Act and to clarify the meaning of “Product of USA” meat labels, which domestic ranchers have said unfairly advantage multinational companies that raise cattle abroad and only slaughter in the United States.

Attorney General Merrick Garland, also speaking at the event, said “too many industries have become too consolidated over time,” and that the antitrust division of the Department of Justice has been chronically underfunded.

The Biden administration issued an executive order last year that advocated a whole-of-government approach to antitrust issues.

A central concern in agriculture has been meat prices, which have risen at a time when the White House is fighting inflation. An analysis in December by the White House economic council found a 120 per cent jump in the gross profits of four top meatpackers since the pandemic began.

The meat industry has said the White House analysis was inaccurate and criticized the new plan.

National Chicken Council president Mike Brown called the plan “a solution in search of a problem.”

North American Meat Institute spokesperson Sarah Little said staffing plants remains the biggest issue for meatpackers and that the White House plan would not address it.

“Our members of all sizes cannot operate at capacity because they struggle to employ a long-term stable workforce,” she said. “New capacity and expanded capacity created by the government will have the same problem.”

Eric Deeble, policy director at the National Sustainable Agriculture Coalition, cheered the plan, calling it a “very positive step to ensure farmers and ranchers receive fair prices.”

The anticipated rulemaking under the Packers and Stockyards Act “could have a significant impact,” said Peter Carstensen, emeritus professor of law at University of Wisconsin-Madison and former antitrust attorney at the Department of Justice. But he noted that investment in independent processing itself would not address market concentration.

Austin Frerick, deputy director of the Thurman Arnold Project at Yale University, an antitrust research centre, said the plan does not go far enough to tackle the power of the top meatpackers.

“I do not believe this (plan) will meaningfully change the concentration numbers,” he said.

— Leah Douglas reports on U.S. agriculture and energy policy for Reuters from Washington, D.C.; additional reporting by Diane Bartz and Trevor Hunnicutt.

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Mexico published an executive order late last year that sought to ban in three years the use of GMO corn for human consumption, but did not define what products would be included, generating confusion in the agriculture industry. The government pledged to substitute imports with local production by 2024.

Mexico is the No. 2 buyer of U.S. corn after China. Mexican Agriculture Minister Victor Villalobos said Mexico would not allow the cultivation of GMO corn but would allow imports from the United States.

“We will continue requiring and demanding yellow corn from the United States,” he told reporters. He said Mexico depended on yellow corn “for agro industries.”

Vilsack said seeds are the next thing the U.S. Department of Agriculture will look at under a Biden administration order on competition.

The administration plans to take a look at the seed industry and “why it’s structured the way it’s structured,” Vilsack said. “You wonder whether these long patents make sense.”

Companies, including Bayer and Corteva, develop genetically modified seeds and herbicides that other companies can only produce once a patent expires unless they pay the patent holder for a license. Bayer, which acquired Monsanto in 2016, has long been dominant in the U.S. market.

Bayer and Corteva did not immediately respond to requests for comment.

— Reporting for Reuters by Tom Polansek.

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