[Hillbillyreefer]

G3 Global Grain Group invests in CWB
G3 is a joint venture between Bunge Canada and SALIC Canada Limited

WINNIPEG, Manitoba, April 15, 2015 /CNW/ -- G3 Global Grain Group (G3), a newly established agribusiness joint venture based in Canada, has been named the successful investor in CWB. The investment of C$250 million (subject to certain closing conditions and adjustments) will result in G3 acquiring a majority ownership interest of 50.1% 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.

G3 is a joint venture between Bunge Canada, a subsidiary of Bunge Limited (NYSE: BG) and SALIC Canada Limited, a wholly owned subsidiary of Saudi Agricultural and Livestock Investment Company (SALIC). The new Canadian company will be headquartered in Winnipeg, Manitoba. 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. As global demand for agri-products grows, consumers continue to demand the high quality grain produced by our Canadian farmers," says Karl Gerrand, CEO, G3. "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."

"Bunge's relationship with Canadian farmers extends nearly 50 years through our grain operations in Eastern Canada and our oilseed processing facilities throughout the country," said Todd Bastean, CEO, Bunge North America. "The investment in G3 and CWB complements our existing Canadian footprint and strengthens our origination and export capabilities in one of the world's premier growing regions."

"Canada is poised to play an increasing role in providing food to a growing world population and in capturing a larger share of the international market demand," says Abdullah Al-Rubaian, Chairman, SALIC. "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. We are committed to G3's growth strategy and are excited to work with Bunge, CWB, and the Canadian farming community."

"G3 considerably strengthens SALIC's position as a global agribusiness investor," says Abdullah Aldubaikhi, CEO, SALIC. "The CWB opportunity offers an excellent strategic fit with SALIC's global agribusiness investment plans, and we are extremely happy and proud that G3 has been chosen as the strategic investor in CWB."

"CWB is pleased to complete the initiative to commercialize CWB and are excited at the prospect of G3 as our strategic investor. G3 brings substantial financial strength and extensive operational experience to execute on this growth strategy, and we are pleased that the farmers will be able to continue to participate in the commercialized CWB," says Ian White, CEO, CWB.

About G3 Global Grain Group
G3 is a joint venture of Bunge Canada and SALIC Canada Limited, a wholly owned subsidiary of Saudi Agricultural and Livestock Investment Company (SALIC). Bunge Canada is a vertically integrated food and feed ingredient company, supplying raw and processed agricultural commodities and specialized food ingredients to a wide range of customers in the animal feed, food processor, foodservice and bakery industries. SALIC, a joint stock company based in Riyadh, Saudi Arabia, is building a global agribusiness by investing in greenfield and existing ventures. At the highest level, G3 seeks to unlock the potential value of agricultural products across Canada by establishing a highly efficient coast-to-coast grain enterprise.

To view the original version on PR Newswire, visit:G3 Global Grain Group invests in CWB -- WINNIPEG, Manitoba, April 15, 2015 /PRNewswire/ --

SOURCE Bunge North America

For further information: G3 Media contact: (204) 272-6600, [email protected]; To register for live 9:30 a.m. Central Time news conference line: Email [email protected]. You will be provided with a dial-in number and passcode

 

[Don Boles]

Hmm...

If it was really for the benefit of farmers as stated wouldn't they have the 50.1% cut?

Thanks HBR.

 

[Hillbillyreefer]

If it was really for the benefit of farmers as stated wouldn't they have the 50.1% cut?

Thanks HBR.

One would think so.

 

[Old Farmer]

If the CWB had some terminals maybe they would have survived

 

[brazil07]

If the CWB had some terminals maybe they would have survived

CWb was never meant to survive; it was supposed to be sold. At same time this new entity will have to have some sort of west coast presence if they are going to be any good at all(for AB farmers anyways). I wonder how many G3 jokes will come up - Government, Grades, Good - likely the most complimentary.

 

[stsdavew]

CWB is sold

Not sure if this is the right place for this thread but i just read 50.1% of the cwb has been sold to bunge and the saudi government for 250 million. Once again the farmers lose

 

[stsdavew]

Never mind i see a threads been started in the general farming board.

 

[Don Boles]

Merged and moved to the category Dave, I think it fits better.

 

[snapper21]

Saudis are securing their food supply. Much like what the Chinese are doing in Africa. Saudis were at one point growing a good portion of their wheat needs. However their irrigation water came from an unreplenishable aquifer and they started eliminating irrigation altogether to preserve what little water they have. Maybe in the end if they want this food supply they may come up with more creative ways to move it out ie. further processing or different shipping like containers.

 

[stsdavew]

Thanks Don. I'm sure the saudi's already have all the processing facilities they need. They just need wheat and therefore I'd also bet that the pooling aspect will be dropped in due time as i see no reason why bunge or the saudis would want the hassle of keeping track of all that and pay out any profits? Most likely if they are only supplying their country there will not be any profits anyway? Not sure how bunge fits in here though

 

[Combine Pilot]

If this is buyer direct, and the combined with the exchange rate on the CAD, this could be very interesting in the grain business.

 

[Combine Pilot]

If it was really for the benefit of farmers as stated wouldn't they have the 50.1% cut?

Thanks HBR.

I don't think anybody would throw 100's of millions into a company without having some control of it.

 

[Don Boles]

I don't think anybody would throw 100's of millions into a company without having some control of it.

Me neither, but they will own all in 5 years.
After it won't make any difference to me.

 

[Combine Pilot]

Yea i know, it is hard to tell how it will all play out. being a Canadian Farmer you just know how it feels to get bent over the table. You get that fresh meat kind of feeling in the back of your head. Lol

 

[gm]

I don't see it as a bad thing....more competition is always good. If the Saudis want wheat, then wheat they will get if they pay for it. There won't be any government involvement anymore who promises wheat for them and tells the farmers you have to deliver.
They are still talking pooling but nobody has proven to me that it works for me, however you can also just sell to them for cash outside the pool and that means they have to bid higher than my elevator next to me.
I have also no problem with a company making profits by being in business...it's what we as farmers do as well.

At the moment I'm optimistic about the new player on the scene...they have got their work cut out for them to get my business.

Time will tell. The old CWB is finally gone, the new one will have to prove itself, there will be no more government interference, long live freedom.

 

[stsdavew]

I don't see it as a bad thing....

i see a "company" that forced farmers to market through them and only them, used some of the profits made to build elevators, buy ships, and other assets instead of returning it all to farmers then selling the controling interest of those assests which were bought supposedly on the behalf of farmers for the benefit of farmers to another company. I dont see it as a good thing... and i fail to see the freedom in that as well. Freedom to me would be allowing the single desk marketing board to exist alongside an open market and letting competition determine who is capable enough to survive.

 

[snapper21]

Think bunge is there cause they have a presence in Canada already. They have the know how and manpower the Saudis lack. How this all plays out for us is up in the air. My own opinion the CWB's goose was cooked anyway. There was no way they could move ahead without either the govt injecting a bunch of money into infrastructure or else getting someone involved with deaper pockets and an international presence. The Saudis or bunge can't be any worse than adm or ConAgra. What good did it do when Richardson and cargil absorbed parts of viterra. One breath we complain about the families monopolizing the grain trade but then we complain about foreign buyers coming in.

 

[Combine Pilot]

What gets me is how did they legally get control of the assets to sell. the only way i can rationalize it, it was a scam from the get go, all to make farmers feel good about the money they were taking. i could be wrong but i don't have near, or any skin in that debacle as much as my dad, who farmed his whole life under the board for 50 years, where the heck is his share.

This extra player would have never have happen if we still had the board, this may be a signal to another country to set up shop for buying directly from farmers. If we see the existing grain companies trying to block this or stifle it in anyway then we know it will be good for us. Maybe they can bring us some cheaper Fert to offset their shipping cost.
It seems like a new business model can be starting where countries come to the farmers, and cut out the middleman which i do believe i have said way back in my earlier posts, (During CWB war era on this board, LOL) for our sake i hope i am right.

 

[farmin cowboy]

i see a "company" that forced farmers to market through them and only them, used some of the profits made to build elevators, buy ships, and other assets instead of returning it all to farmers then selling the controling interest of those assests which were bought supposedly on the behalf of farmers for the benefit of farmers to another company. I dont see it as a good thing... and i fail to see the freedom in that as well. Freedom to me would be allowing the single desk marketing board to exist alongside an open market and letting competition determine who is capable enough to survive.

x2 Who gets "CWB" share of sale?? If its 50.1 percent it may as well be 100 percent, or do "they" need 49.9 percent to figure out how to slide the money into their pockets.:sFun_mischieviousbi

 

[stsdavew]

You know it never did make sense to me as to why the cwb bought two shipping vessels when they had no infrastructure for storage... Unless... Could it be possible that this has been in the works for a long time? Kinda coincidental that the cwb would buy ships instead of storage and then sell out to an overseas company? Anyone like a good conspiracy theory lol