Winnipeg's Richardson International buys Viterra assets
Winnipeg grain company Richardson International is to buy nearly $1-billion in assets from Viterra Inc.
In a deal announced Tuesday, Richardson's acquisiton is part of Swiss-based Glencore International's takeover of Viterra.
Glencore says further details will be forthcoming, but for now, the plan is for Calgary and Regina-based Agrium Inc. to acquire the majority of Viterra's retail agri-products business, including a 34 per cent interest in Canadian Fertilizer Limited, for $1.8 billion.
And Winnipeg's Richardson International will acquire 23 per cent of Viterra's Canadian grain-handling assets, certain agri-centres and certain processing assets in North America for $800 million in cash.
Richardson will take over 19 grain elevators across Western Canada as well as a terminal in Thunder Bay, Ont., and several oat-processing facilities.
"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 Hartley Richardson, Chairman of Richardson International and President and CEO James Richardson & Sons Ltd.
Subject to regulatory approval, Richardson's agreement with Glencore also includes a 25 per cent stake in the Cascadia Terminal (Vancouver), allowing Richardson to ship increased volumes of grain and oilseeds.
Richardson will also acquire the Can-Oat Milling business with oat processing plants in Portage la Prairie, Man., Martensville, Sask., and Barrhead, Alta., and 21st Century Grain Processing, which has an oat processing plant in South Sioux City, Nebraska and a wheat mill in Dawn, Texas.
Richardson International president Curt Vossen said the deal will make the firm one of the two largest grain-handling companies in Canada.
He said there is a good possibilitity the acquisition will add jobs at the head office in Winnipeg.
"It's just slightly under a billion-dollar investment on our company's part, and as a single transaction it is the biggest we have ever been involved in," he said.
Doug Chorney, president of Keystone Agricutural Producers, said farmers are generally wary of consolidation within the grain handling and products industry.
But he said having Richardson International based in Winnipeg is an asset for Manitoba.
"Having local ownership in the industry is useful, I think, to everybody, and we certainly have seen Winnipeg benefit from having Richardson grain located here," Chorney said.
Glencore said it had obtained support of Viterra's board to make a $16.25 per share takeover offer for the Saskatchewan-based grain handler. The move puts a price tag of roughly $6 billion on Viterra.