Bunge venture with Saudi company buys controlling interest in CWB
By Daniel Enoch
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, April 15, 2015 - A joint venture between a state-owned Saudi Arabian investment company and the agribusiness giant Bunge has purchased a controlling interest in CWB, formerly the Canadian Wheat Board, for C$250 million ($203 million U.S
The joint venture, known as G3 Global Grain Group, will hold a majority ownership interest of 50.1 percent in CWB, with the minority ownership interest to be held in trust for the benefit of farmers, Bunge said in a news release. The transaction is expected to close in July
The deal comes three years after the Canadian government ended its monopoly as the exclusive purchaser of wheat and barley from western Canada's farmers, opening up the market to competition for the first time in some 70 years.
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Bunge's partner in the venture is SALIC Canada Ltd., a wholly owned subsidiary of Saudi Agricultural and Livestock Investment Company (SALIC). Saudi Arabia relies on imports to meet 70 percent of its food requirements and the oil-rich nation has been looking for ways to insure adequate grain supplies.
G3 will be headquartered in Winnipeg. CWB is a grain handling and trading company that operates a network of seven grain elevators in Western Canada and port terminals in Thunder Bay, Ontario, and Trois Rivieres, Quebec. CWB is building four additional state-of-the-art grain handling facilities in Bloom and St. Adolphe, Manitoba, and Colonsay and Pasqua, Saskatchewan. Bunge's export terminal in Quebec City as well as four elevators in Quebec will be part of the transaction.
“It is a dynamic time for Canadian agriculture,” said Karl Gerrand, G3's chief executive officer. “As global demand for agri-products grows, consumers continue to demand the high quality grain produced by our Canadian farmers.”
“Our vision is to establish a highly efficient coast-to-coast Canadian grain enterprise that provides stronger market access solutions for growers and delivers value to our stakeholders and the Canadian agriculture industry as a whole. We welcome the CWB team and farmer equity owners, and look forward to working together to build a new and dynamic company.”
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