Viterra grain terminal in Vancouver, B.C.
Glencore International PLC has struck a $6.1-billion agreement to buy Viterra Inc. (VT-T15.91-0.06-0.38%), in a deal that would carve up a historic Prairie company and reshape the country’s agriculture business.
The transaction, which had been heavily rumoured for days, was also a classic display of Glencore CEO Ivan Glasenberg’s style: fast, opportunistic, and politically and strategically clever.
The result is that Glencore, already a global commodities trading giant in everything from oil to sugar, will become the biggest trader of wheat, barely and canola.
The bid was, in a sense, inevitable because of the Conservative government’s decision to use legislation to strip the Canadian Wheat Board of its monopoly on export sales of wheat and barley grown in Western Canada.
Glencore and other big names in the agriculture trading business, among them Archer-Daniels-Midland, Bunge and Noble Group, knew that the end of the monopoly in August would open up vast opportunities once Canadian farmers gained the right to sell their own grain.