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Glencore takeover of Viterra wins Canada minister’s nod

Sun Jul 15, 2012 5:30pm EDT

WINNIPEG, Manitoba/NEW YORK (Reuters) – Glencore International Plc, one of a world’s largest line suppliers, has won a Canadian regulator’s capitulation for a roughly C$6.1 billion (U.S. $6 billion) takeover of pellet handler Viterra Inc.

Sunday’s capitulation by Canadian Industry Minister Christian Paradis moves a transaction a step closer to closing, yet capitulation is still indispensable by China’s Ministry of Commerce.

Glencore in Mar offering to compensate C$16.25 per share for Viterra, that owns a largest share of Western Canada’s pellet storage and plantation supply outlets, as good as scarcely all pellet storage ability in South Australia.

The transaction anticipates Glencore’s sale of some Viterra resources to dual Canadian cultivation companies, Agrium Inc and privately-held Richardson International Ltd.

In extenuation approval, Paradis pronounced a Viterra takeover is “likely to be of net advantage to Canada.”

Paradis also cited commitments that Glencore has made, including a boost to Viterra’s collateral spending by some-more than C$100 million over 5 years, work on initiatives with Manitoba and Saskatchewan governments, and free contributions.

Chris Mahoney, executive of rural products during Glencore, pronounced a capitulation “recognizes a long-term advantages for farmers and Canada.”

The merger would make Glencore a stronger opposition to cultivation companies including Archer Daniels Midland Co, Bunge Ltd, Cargill Inc and Louis Dreyfus Corp. These companies are infrequently referred to as a industry’s ABCD quartet.

It could also assistance Glencore, that is formed in Baar, Switzerland, advantage from flourishing tellurian direct for food, generally as diets and incomes urge in China and India.

Viterra controls scarcely half a grain-handling marketplace share in Canada, a biggest exporter of open wheat, durum and canola.

Glencore anticipates transferring many of Viterra’s sell agri-products business, including a 34 percent interest in Canadian Fertilizer Ltd, to Calgary-based Agrium for C$1.8 billion.

Richardson, that is formed in Winnipeg, would acquire 23 percent of Viterra’s grain-handling resources and some North American estimate resources for C$800 million.

Glencore pronounced capitulation from China is not approaching before a finish of July. Canada’s eccentric Competition Bureau has pronounced it will not conflict a Viterra takeover, though has not ruled on a exchange with Agrium and Richardson.

In 2010, Canada blocked a roughly $40 billion takeover of Potash Corp of Saskatchewan by Australia’s BHP Billiton Ltd, a world’s largest mining company, since it did not yield a “net benefit” for a country.

(Reporting by Rod Nickel in Winnipeg, Manitoba and Jonathan Stempel in New York)

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