By Paul Vieira

OTTAWA--Canada's antitrust watchdog said Tuesday Bunge's deal to acquire Glencore-backed Viterra would cause substantial harm to competition because of Bunge's ownership stake in a competing network of western Canadian grain elevators.

The proposed $8.2 billion deal would result in a "significant loss of rivalry between Viterra and Bunge," the Competition Bureau said in a report, submitted to the country's Transport Minister, who has final say on the deal.

Last June, U.S. grain trader and oilseed processor Bunge agreed to buy Viterra in a deal that aims to expand the company's reach in North American crops.

The bureau said part of its concern stems from Bunge's 25% stake in G3 Global Holdings, which operates 20 grain elevators in Canada, as well as terminal elevators at ports in British Columbia, Ontario, and Quebec. Besides Bunge, G3's other shareholders are the Saudi Agricultural and Livestock Investment Company, or Salic, and a group of western Canadian farmers, via the Winnipeg, Manitoba-based Farmers Equity Trust.

"Bunge is likely able to materially influence G3 through its minority interest," the bureau said in its report. The bureau said G3 is one of Viterra's fastest-growing and aggressive competitors for the purchase of grain from farmers in a number of western Canadian markets.

"The proposed transaction will increase Bunge's incentive to influence G3's economic behaviour to the detriment of competition," the bureau said. "A firm that holds a minority position in a [firm] and acquires a competitor to that business might have a reduced incentive to compete with the [firm] in which it holds an interest."

In a joint statement, Bunge and Viterra said they believe some of the watchdog's findings "are misplaced," and intend to work with Canadian officials to address any concerns. Shares of Bunge fell slightly, down 0.25%, in trading Tuesday after the bureau's report.

A G3 spokesman said G3 has multiple shareholders but operates independently, adding the company does not comment on shareholder matters.

Bunge and Viterra are important partners to farmers around the world, buying crops and selling them to food companies, governments and other buyers around the world. The companies own a range of processing plants that turn oilseeds and grain into vegetable oil, fuel, livestock feed and other products.

In Canada, the two companies have assets that include grain elevators, oilseed crushing facilities, and terminal elevators at ports. Glencore acquired Viterra in 2012.

Canadian farmers grew over 90 million tonnes of grains, oilseeds, and pulses in the most recent crop year, and the country is a leading producer of a number of grains, including canola and durum wheat.

Write to Paul Vieira at

(END) Dow Jones Newswires

04-23-24 1155ET