Glencore to buy Canada’s Viterra for $6.1 billion

Commodity giant Glencore International PLC has reached a $6.1-billion deal to buy Canada’s grain handler and agricultural retailer Viterra Inc., and announced  plans to sell most of its Canadian assets to Agrium Inc. and Richardson International Ltd.

In a conference call, Glencore’s CEO Chris Mahoney, said the deal, which was widely anticipated by investors, is worth $16.25 a share in cash. He added the company expects its friendly takeover bid to win the approval of regulators in Canada and the United States.

"Viterra employees created a world-class agri-business, of which I am very proud," chief executive Mayo Schmidt said in a statement. "This has been recognized by Glencore and its partners, and this transaction creates value and opportunities for employees, our communities, farmers and customers in all the markets we serve."

The Switzerland-based giant intends to sell Viterra's retail division to Calgary-based Agrium for $1.8 billion, while Richardson will acquire 23% of Viterra's Canadian grain handling assets in North America, along with certain other assets, for $800 million.

"This is an important milestone in our 155-year history as it strengthens its position as a Canadian and global leader in agriculture and food processing," said  Richardson's CEO Hartley T. Richardson in a statement.

Glencore said it is confident the acquisition of Viterra will deliver significant overall benefits to grain farmers, as they will have access to the company’s global distribution channels. This, said Glencore, will increase their ability to export their product into international grain and oilseeds markets.