G3 Global Grain Group Investing C$250 Million in CWB
The newly formed agribusiness joint venture, G3 Global Grain Group (G3), is investing C$250 million in CWB (formerly Canadian Wheat Board). G3, comprised of Bunge Ltd. subsidiary, Bunge Canada, and SALIC Canada Limited, a wholly-owned subsidiary of Saudi Agricultural and Livestock Investment Co. (SALIC), will acquire a 50.1% majority stake in CWB, which has been seeking a majority investor to help it reposition as an independent grain handler since 2012 when its single desk marketing monopoly was dismantled by the Canadian government. This strategic investment, which is scheduled to close in July 2015, lends significant financial strength and operational expertise to CWB in support of the company’s goal of commercialization, while leaving the remaining minority stake to be held in trust for the benefit of farmers.
The investment comes as global demand for agri-food crops is expanding and as Canada is poised to play an increasing role in meeting demand for high-quality grains. Chief executive of G3, Karl Gerrand states in a Bunge press release, "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.”
CWB operates a network of seven grain elevators across Western Canada, and port terminals in Thunder Bay, Ontario and Trios Rivieres, Quebec, and is currently constructing four additional state-of-the-art grain facilities in St. Adolphe and Bloom in Manitoba, and Colonsay and Pasqua in Saskatchewan. Bunge’s four elevators in Quebec and its export terminal in Quebec City will also be included in the transaction.
The formation of G3 reinforces Riyadh-based SALIC’s position as an investor in global agribusiness, and supports its goal of investing in infrastructure in countries such as Canada that are dependable producers and exporters of high quality grain.
Bunge has operated grain facilities in Eastern Canada and oilseed processing facilities across the country for 50 years. It’s partnership in G3 and its stake in CWB will improve Bunge’s origination and export capabilities in a leading grain producing country which is poised to be a key provider of food to global consumers.