Glencore’s Viterra Takeover Gets Chinese Regulatory Nod
Glencore International Plc (GLEN)’s C$6.1 billion ($6.2 billion) takeover of Viterra Inc. (VT), Canada’s largest grain handler, received Chinese regulatory approval nine months after the deal was announced.
Approval from China’s Ministry of Commerce will allow for the takeover to be completed by Dec. 17 with funds paid out to shareholders that day, Regina, Saskatchewan-based Viterra said yesterday in a statement. Glencore agreed to buy Viterra for C$16.25 a share.
The agreement of the ministry was the deal’s final regulatory hurdle. Viterra said March 20, when the takeover was announced, that the transaction was expected to close by the end of July. The company pushed back the deadline that month, and again in August and September, while it awaited the ministry’s decision. Glencore said in July it received Canadian approval.
Buying Viterra is part of Baar, Switzerland-based Glencore’s efforts to expand its agricultural unit and extend its geographical reach. Grain handling and marketing made up 68 percent of Viterra’s sales in the year through Oct. 31, with agricultural products accounting for 19 percent and food processing 13 percent, data compiled by Bloomberg show.
Glencore, the world’s largest publicly traded commodities trader, dropped 0.1 percent to close at 345.20 pence in London yesterday. Viterra gained 2.1 percent to close at C$16.20 yesterday in Toronto.
Glencore is also awaiting Chinese approval for its planned 20.5 billion-pound ($33 billion) acquisition of Swiss mining company Xstrata Plc (XTA), which would be the largest takeover this year. A Glencore spokesman declined to comment on the timing of that decision.
The Xstrata deal also requires approval from South Africa’s regulator. The country’s state-owned power supplier, Eskom Holdings SOC Ltd., has voiced concerns that coal supplies may be affected by the combination. Eskom supplies 95 percent of South Africa’s electricity.
“Eskom is concerned about the effects that the proposed merger would have on Eskom’s ability to obtain a timely, sufficient and competitively priced source of coal,” it said yesterday in a statement. “Eskom does not seek an outright prohibition of the merger, but has proposed certain conditions which the tribunal could impose to support security of domestic coal supply.”
A public hearing on the Xstrata takeover is scheduled for Dec. 10 to 14. Glencore has said it’s seeking to complete the deal by the end of the year.
Canadian Prime Minister Stephen Harper said yesterday he approved Beijing-based Cnooc Ltd.’s $15.1 billion takeover of Calgary-based Nexen Inc. He also approved Petroliam Nasional Bhd.’s C$5.2 billion ($5.2 billion) acquisition of Canada’s Progress Energy Resources Corp.