Politicians debate possible Viterra takeover
The speculation surrounding a possible takeover bid at Viterra is reminding some people of the 2010 potash saga when the premier stepped in to block a hostile takeover of Potash Corp by BHP Billiton.
Premier Brad Wall said the provincial government will offer an opinion if a tangible bid comes forward for the Regina- based grain handler. Swiss commodities trader Glencore PLC and U.S. based agribusiness company Cargill are reported to be making offers but there is no official confirmation on either one.
He insisted any review of the takeover bid will be aggressive and thorough to make sure a buy-out would have a net benefit to the people of Saskatchewan.
“Number one from a jobs perspective, number two from a fiscal perspective and number three from a strategic interests perspective,” Wall explained.
He maintained the government will use the same three criteria that guided them on the PCS deal even though grain is not considered a ‘strategic resource’ for the province.
Saskatchewan New Democrats said food should be considered as much of a strategic resource as potash.
Interim NDP leader John Nilson said the government should not wait to take action.
“There may have been some of this work already done and more importantly that there would have been discussions with the Prime Minister,” he said.
Nilson said the key issue for Canada is who controls the flow of grains and oilseeds.
“While it’s the farmers that control it until they deliver it to the sales people, if all of the places where you can sell your food are from outside of Saskatchewan and outside of Canada, we immediately lost the control,” Nilson explained.
Any takeover bid by an international company must first be approved by the federal government through Investment Canada.
Liberal MP Goodale raises Viterra question in House of Commons
A federal politician also jumped into the debate over Canada's largest grain company. Liberal MP for Wascana, Ralph Goodale voiced his concerns in the House of Commons Tuesday. He is pushing the Conservative government to lay down more rules for foreign takeovers.
"15 months after their frantic flip-flop on potash, the Conservatives have still not turned a wheel on their promise to clarify the rules," he said.
When the government rejected BHP Billiton's bid for PotashCorp the federal government did promise to establish more rules for foreign takeovers.
Goodale wants to know how Agriculture Minister Gerry Ritz will handle the situation.
"How exactly do they define 'net benefit'? What constitutes a strategic asset and how will farmers be better off with control vested in Minneapolis, Decatur or Switzerland rather than Regina, Calgary or Winnipeg," he asked.
In response, Ritz said any questions about this particular issue are "premature at best".
Agriculture analyst says interest spurred by end of Wheat Board
Saskatchewan agriculture analyst Kevin Hursh said the interest in Viterra is spurred by the end of the Canadian Wheat Board monopoly.
"Viterra itself was forecasting $40 or $50 million per year better returns now that it would be doing marketing of wheat, durum and barley," he said.
Hursh explained part of the attraction to Viterra specifically is the company's dominance in export terminal capacity wit h the change in the market.
"The assets for terminals are in the hands of a fairly concentrated group of companies and that's a bit of a worry for market access and something that I think will have to continue to be monitored," he said.
Hursh said the Regina-based grain handler was likely hoping to expand on it's own within the new free market for wheat, but now the tables have turned and the company is the target of a takeover from outside companies.
Both Glencore and Cargill are staying silent about the reports and Viterra itself only reported 'third party interest', without naming any specific companies.
Edited by News Talk Radio’s Adriana Christianson with files from Samantha Maciag, Ashley Wills, Patrick Book and Alec Docking