May 12, 2010
Viterra seeks more deals amid antitrust laws
Viterra Inc., the largest Canadian grain-handler, expects more acquisition opportunities in the US as the country increases enforcement of antitrust laws in the agriculture industry.
Viterra sees small "bolt-on" acquisitions as it integrates last year''s A$1.6 billion (US$1.4 billion) purchase of ABB Grain Ltd. of Australia, chief executive officer Mayo Schmidt said.
The Obama administration is probing whether consolidation in the agriculture industry has hurt competition by concentrating market power among fewer companies, officials said in March.
Viterra does not plan major acquisitions until it finishes absorbing ABB Grain. Schmidt did not disclose any specific US companies or units that may be for sale because of antitrust issues.
Viterra rose 9 cents, or 1.1%, to CA$8.16 at 4:58 p.m. in Toronto Stock Exchange trading. The shares have fallen 17% this year.
The company has pursued a strategy of growth through acquisition by leveraging earnings from its Canadian grain- handling business. Analysts have estimated Viterra will have sales of more than CA$8.5 billion (US$8.3 billion) this fiscal year, up from CA$1.6 billion in 2006, the year before the company bought competitor Agricore United and became Canada''s largest grain handler.
In China, Viterra is joining with Guangxi Beibu Gulf International Port Group Co. to build a canola-crushing plant in the southern province of Guangxi. Viterra plans to invest about US$25 million in the venture.
The deal builds on Viterra''s access to canola supplies and its existing marketing relationships in China.
As a grain handler, Viterra gathers grains and oilseeds from farmers, tests the commodities for quality, and cleans, dries and blends them in preparation for shipping. Viterra controls about 45% of Canada''s grain-handling business.