A joint bid by Glencore, Richardson and Agrium would likely be palatable to the bureau as long as Richardson doesn’t get too many elevator and port assets, said agriculture analyst Chuck Penner of LeftField Commodity Research in Winnipeg.
Agrium is already the biggest U.S. farm retailer and Penner said its leap to the same position in Canada by purchasing Viterra’s stores might be less of a competition concern because farm retailing has a lower cost of entry than grain handling.
Viterra is currently the biggest Canadian farm retailer, with about 260 stores selling seed, chemicals and fertilizer.
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A foreign takeover of Viterra would be subject to a federal government review to determine whether it is of “net benefit” to Canada. The government vetoed a takeover of Saskatoon-based PotashCorp by Anglo-Austalian mining giant BHP Billiton in 2010, damaging the country’s image as a free market supporter.
Ottawa may be less likely to block a foreign bid for Viterra, however, because its home province of Saskatchewan has already said it doesn’t see the company as a strategic resource and does not collect royalty revenues from it, unlike PotashCorp.
Adding names of Canadian farm champions like Agrium and Richardson — a family owned company in business for 155 years — would likely make Ottawa more supportive of a foreign bid, since it would make two Canadian companies stronger.
Glencore and Richardson declined to comment, while a spokesperson for Viterra could not be immediately reached.
