A newly established agribusiness partnership based in Winnipeg has been selected as the majority investor for the former Canadian Wheat Board.
CWB's search process concluded early, with a $250-million investment from G3 Global Grain Group.
Gerry Ritz, the federal agriculture minister, and representatives from G3 will discuss the deal with reporters at 10:30 a.m. ET. CBCnews.ca will carry the event live.
A press release from G3 says it has acquired a majority interest, of 50.1 per cent, in CWB, with the minority ownership interest to be held in trust for the benefit of farmers.
The transaction is expected to close in July 2015, it says.
G3 was formed through a partnership between:
- Bunge Canada, a subsidiary of Bunge Limited.
- SALIC Canada Limited, a wholly owned subsidiary of Riyadh-based Saudi Agricultural and Livestock Investment Company.
The legislation that ended the CWB's monopoly over marketing Prairie wheat and barley gave the revamped wheat board — purged of farmer-elected directors and now run by a board of Harper government appointees — until 2016 to come up with a privatization plan and until 2017 to implement it. Otherwise, it would be dissolved.
CWB spoke openly of wanting to beat that deadline in order to end uncertainty about its future as quickly as possible.
Parties involved in the talks are bound by confidentiality agreements, so it's unclear exactly which multinational grain companies were in the running or how much they'd offered.
Agriculture and Agri-Food Canada tendered a third-party study of the value of CWB's assets but has refused to release that report. It has also refused to release any financial details of CWB's operating results since the market opened up in 2012, citing competitiveness concerns.
A Canadian farmer-investor bid for the CWB by the Farmers of North America group was based on a valuation of the CWB's assets at between $250 and $300 million. That bid was rejected last fall.
CWB now operates seven grain elevators in Western Canada and port terminals in Thunder Bay, Ont. and Trois Rivieres, Que. Four more grain facilities are under construction in Manitoba and Saskatchewan.
Bunge Canada's terminal in Quebec City and its four elevators in Quebec are part of this deal, according to the press release.
Todd Bastean, the CEO of Bunge North America, said in the release this investment "complements our existing Canadian footprint" and acquiring what remains of the marketing expertise that once sold all of Western Canada's wheat abroad strengthens the company's export capabilities.
"SALIC is committed to infrastructure investment in countries such as Canada, which are exporters of surplus supplies of high quality grain. The launch of G3 will enable us to invest in infrastructure across Canada, providing more market choices for Canadian producers," said Abdullah Al-Rubaian, SALIC's chairman, who also said Canada was poised to capture a larger share of the international market demand.
"G3 brings substantial financial strength and extensive operational experience... and we are pleased that the farmers will be able to continue to participate in the commercialized CWB," said Ian White, CEO of CWB in the G3 press release.