It was confirmed Tuesday morning that Viterra Inc. has been purchased by Glencore International for $6.1 billion, subject to approval from the regulatory agencies and the Canadian government.
As the deal unfolds its complexities will be revealed since Glencore has expectations of splitting various sectors of the Regina and Calgary based Viterra into three parts for subsequent sell-offs to Richardson International Ltd. and Agrium Inc. Glencore, a Swiss-based major commodities player, will keep nearly $3 billion worth of Viterra in what is being described as a friendly takeover. Richardson and Agrium will split up the rest.
There were hints something of this nature would happen ever since the federal government moved to dismantle the Canadian Wheat Board this coming August.
With value being added for nearly all grain handling companies that will be there to pick the bones of the CWB carcass, Viterra was in the best position to take the biggest hunk. Now it'll be Glencore, and to a lesser extent, Richardson and Agrium who will participate in the feast.
What is interesting to note, and what is probably of greater interest to those of us in Saskatchewan, is that Glencore intends to retain a head office presence in Regina, while Richardson and Agrium will move their Viterra headquarter interests to Winnipeg and Calgary respectively, where they already have glass towers.
It won't be known for some time whether all 400 administrative jobs in Regina will be retained. We doubt they will, but the mere mention of a continued head office appearance in the Queen City should raise hopes.
It was just last week when Brad Wall and others in the provincial government spoke of the importance of having head offices here. We have a few, but not many and the potential loss of another major player, Viterra, which was the spawn of the Saskatchewan Wheat Pool, was troubling.
Maybe Glencore saw this mini-statement of support as being somewhat important in crafting their bid and subsequent takeover. We would certainly hope so, because it is important to some of us. It's also important that this international player has chosen a couple of Canadian companies to partner up with to complete the deal. Again, probably a good business decision.
Chances are Saskatchewanians will soon get an opportunity to get to know Glencore's main cast of leading characters a whole lot better. That should be a good thing.
It is a well documented fact that although Saskatchewan is the second most productive oil-bearing province in the country, practically all the major players in that sector choose to set up headquarters in Calgary, Edmonton, Texas or other southern centres. We've paid attention to that fact, and while the oil industry has been good to Saskatchewan, the fact remains the profits are sent elsewhere and the main players and biggest paycheques are dispensed outside the borders of our somewhat rectangularly configured province while potash (sometimes reluctantly), uranium and to a lesser extent other mining companies have established corporate structures here.
With Viterra, Saskatchewan was still able to claim a semblance of ownership in the grain game. After all, it was wheat, barley and oats that got us here in the first place, and we feel a need to remind ourselves of our roots.
Maybe Glencore saw that too and saw that Saskatchewan perhaps was not just a large resource-bearing hole to be exploited and otherwise ignored, but one that was worthy of housing a good portion of their brain trust as well as providing them with a new profit centre.
