Competition bureau finds 'substantial' anti-competitive effects with proposed Bunge-Viterra merger

The proposed merger of agricultural giants Viterra and Bunge is raising competition concerns from the federal government.

The proposed merger of agricultural giants Viterra and Bunge is raising competition concerns from the federal government.

A recent report from Canada’s Competition Bureau concluded that Bunge Ltd's $8.2 billion acquistion of Viterra is “likely to result in substantial anti-competitive effects and a significant loss of rivalry” in a number of grain and canola oil markets across Canada.

The bureau pointed to Bunge’s ability to “materially influence the economic behaviour” of G3 Global Holdings – a major competitor to Viterra.

“As a minority shareholder of G3, Bunge has access to G3’s confidential competitively sensitive information,” the report read. “Provid[ing] a channel through which G3’s largest competitor [Viterra] has the ability to access information about G3’s economic and competitive strategies.”

As a result of the proposed merger, the bureau expects a substantial lessening of competition for the purchase of canola between Bunge and Viterra in certain western Canadian markets. The report highlighted the Nipawin and Altona areas where the companies’ market share exceeded 45 per cent and 60 per cent respectively.

“The Proposed Transaction will result in the combination of the company with the most oilseed crushing facilities and the company with the most primary grain elevators in Western Canada,” the report read.

Both G3 and Viterra hold a combined share of 42 per cent of elevator capacity in western Canada.