G3 Global Grain Group completes investment in CWB

by World Grain Staff
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WINNIPEG, MANITOBA, CANADA — G3 Global Grain Group (G3), a newly established agribusiness joint venture based in Winnipeg, Manitoba, Canada, announced on July 31 a successful close to its investment in the Canadian Wheat Board (CWB) which secures a majority interest in the company. CWB will be combined with the grain assets of Bunge Canada to form a new Canadian agribusiness, G3 Canada Limited.

CWB has been preparing for commercialization since the government ended its monopoly in 2012. The Marketing Freedom for Grain Farmers Act gave CWB a deadline of August 2016 to submit an application for continuance.

CWB and its corporate advisors established a strategy and timeline for commercialization that aimed to beat that deadline. CWB conducted an extensive worldwide search, engaging accounting and legal expertise to consider over 50 potential strategic investors.

On April 15, the Canadian government announced approval of a deal reached between the CWB and G3, which included a G3 investment of $250 million in the CWB, subject to closing adjustments. It will result in G3 acquiring a majority ownership interest of 50.1% in CWB with the minority ownership interest to be held trust for the benefit of farmers.

"Combining the local market presence and global expertise of CWB and Bunge Canada Grain provides the opportunity to fulfill a promise to Canadian producers, to create a new and competitive alternative for the marketing of their grain," says Karl Gerrand, G3 chief executive officer (CEO). "The name change to G3 Canada Limited represents another step towards our vision of building a highly efficient coast to coast grain handling enterprise, and I welcome the opportunity to work with the dedicated teams from G3, Bunge Canada and CWB, who have worked so hard to bring these transactions to a successful conclusion."

G3 Canada Limited is establishing a coast-to-coast Canadian grain enterprise designed to provide a unique competitive alternative to farmers, and superior service to customers and stakeholders. G3 Canada's assets range from inland grain and deep-sea port terminals stretching from Leader, Saskatchewan to Québec City, Québec, to Great Lake grain transport vessels and a fleet of grain hopper cars. The vertical integration of these assets along the agricultural commodity chain forms the basis of a smarter path from Canadian fields to global markets.

Ian White, CWB president and CEO, led the organization through the transformational process, and is gratified with the investment outcome. "CWB is pleased to complete the initiative to commercialize. The capital investment G3 brings, as well as extensive operational experience, is a huge benefit to the sector, and we are pleased that Canadian grain producers will be able to continue to participate in the growth of the new company."

The commercialization of CWB has been part of the Canadian government’s broader modernization of Canada's grain sector to stimulate investment and create jobs and economic growth for farmers and Canadians. It includes an aggressive trade and market access agenda, grain transportation and supply chain improvements and investments in science and research.

"Canada's farmers depend on an efficient gateway to get their top quality products to the world,” said Agriculture Minister Gerry Ritz.  Today, we see how marketing freedom continues to open the way for investments in the grain industry leading to jobs and growth for farmers and Canadians."

Bunge Canada's existing oilseed processing operations remain with Bunge Canada, and are not part of the investment transaction being announced.

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