Glencore makes $6-billion grain acquisition

Swiss-based commodities firm Glencore has agreed to buy Canada's largest grain handling company Viterra in a deal valued at $6.14 billion (SFr5.6 billion).

Glencore will immediately sell the majority of Viterra’s Canadian assets and certain other businesses to Agrium and Richardson International for about $2.61 billion in cash, it said.

The arrangement indicates Glencore is mainly interested in Viterra’s lucrative overseas assets — including Australia’s largest grain handler — while its vast Canadian assets will remain domestically controlled.

The world’s largest diversified commodities trader said it would buy all shares of Viterra for C$16.25 per share in cash, a premium of about 50 percent over its trading value before the first word of a possible deal emerged on March 8.

In the throes of a $36-billion takeover of Anglo-Swiss mining concern Xstrata, Glencore is already one of the world’s biggest traders in raw materials, such as coal, cotton and corn.

Canadian authorities will likely examine whether the takeover of Viterra is a “net benefit” to Canada. They previously blocked Glencore rival BHP Billiton’s takeover of Potash Corp. because of concerns.

Glencore said in a statement on Tuesday that the deal was part of its strategy to strengthen its position as one of the global leaders in grain and oilseeds markets.