U.S. agribusiness Bunge Ltd.’s proposed takeover of Viterra Ltd. was meant to create a global agriculture giant, but the deal is drawing concerns from the Canadian Competition Bureau.

Originally announced in June 2023, Bunge’s US$8.2-billion acquisition would give Viterra shareholders a 30 per cent stake in the combined business and $2 billion in cash. The deal would create a big enough business to take on the other major players in the space, such as Minneapolis-based Cargill Inc. and Chicago's Archer-Daniels-Midland Co. 

On Tuesday, however, the Competition Bureau said the deal is “likely to result in substantial anti-competitive effect” and a loss of competition between the two agriculture businesses, specifically when it comes to grain purchasing in Western Canada and the sale of canola oil in Eastern Canada.

The bureau is also concerned with Bunge’s minority shareholder connection to grain company G3, a major competitor to Viterra.

“Bunge could materially influence the economic behaviour of G3 Global Holdings (G3), a major competitor to Viterra,” the bureau wrote in a news release. “As a minority shareholder of G3, Bunge has access to G3’s confidential competitively sensitive information.”

In a statement, Bunge highlighted that the bureau did not raise any major concerns regarding grain purchasing or port operations.

“We believe the noted concerns are misplaced and look forward to working with Transport Canada and the Bureau to provide further information addressing these points,” the company wrote in the statement on Tuesday.

“We are pleased the regulatory process is advancing and are confident the transaction will yield considerable benefits to Canada. These will include stronger supply chains in uncertain global markets, maintaining Canadian leadership in agriculture and food by increasing capacity to invest, and employing thousands of Canadians in well-paying jobs.”

The deal is also facing scrutiny in Argentina, where a completed merger would see the combined company owning 40 per cent of the country’s soy market. 

Transport Canada now has until June 2 to complete its public interest assessment and provide it to Transport Minister Pablo Rodriguez, who will then advise the Governor in Council on final decisions.

Bunge anticipates the deal will close in mid-2024.

With files from Bloomberg News