Chris Mahoney, director of agricultural products at Glencore, said Tuesday that the company will use Viterra (TSX:VT) to build its business in North America.
"We will make Regina the platform for our North American agricultural operations and in the future we will look to expansion, with Regina as the headquarters, into the United States," he said Tuesday.
Glencore will pay $16.25 per share for Viterra.
Calgary-based Agrium Inc. (TSX:AGU) and privately held Richardson International, based in Winnipeg, will then in turn buy the majority of Viterra's Canadian assets for a combined $2.6 billion in cash.
Viterra shares closed down six cents at $15.91 on the Toronto Stock Exchange. The shares were at about $11 before the takeover interest was revealed more than a week ago.
Mahoney downplayed the regulatory hurdles the deal faces, including a review under the Investment Canada Act that will test whether the takeover is of net benefit to Canada.
The Competition Bureau also do its own review, said spokesman Greg Scott, adding it's unclear how long the process will take.
Mahoney said the deal will strengthen Agrium and Richardson as well as give Canadian farmers better access to world markets through Glencore.
"We will be excellent custodians of the assets. We will keep them state of the art. We will bring in worldwide best practices... We will certainly invest to expand that infrastructure as necessary," Mahoney said.
"I think those things combined will provide a net benefit."
Part of the agreement also includes keeping Viterra's North American head office in Regina, a key concern of Saskatchewan Premier Brad Wall, who had led opposition to BHP Billiton's failed hostile takeover bid for PotashCorp (TSX:POT).
While he called head office promise "encouraging," Wall told reporters he wants to find out what exactly that means.
"We know that some of the officers of Viterra today are in Calgary. It looks like those are coming back to Regina. So that's very positive," he said.
But jobs that are currently of the retail and grain handling business may move elsewhere.
Viterra's market share is being split between Richardson and Agrium, which could be a good thing from a competition standpoint, said Wall.
"There's some that may make the case that actually, from a competitive process, it's better. It's less concentrated."
A union that represents workers at Viterra said it's concerned hundreds of jobs are at risk at Viterra's head office in Regina, as well as many others elsewhere in the province.
"The prospect of dismantling Viterra as part of this takeover is a grave concern for the people who have sacrificed mightily to sustain and build this enterprise," said Hugh Wagner, general secretary of the Grain and General Services Union.
The federal NDP's agriculture critic worried the takeover would reduce farmers' choices to market, process and handle their grains.
"Consolidating the grain industry into the hands of a few companies hurts Canadian farmers," NDP MP Malcolm Allen said in a release.
"We're calling for the Conservative government to review any deal to make sure that Canadian jobs and farmers are protected."
Alberta Investment Management Corp., Viterra's largest shareholder with a 17 per cent stake, as well as Viterra's directors and senior executives have agreed to support the deal.
If anything, Aimco CEO Leo de Bever said the deal will offer farmers more marketing choice, not less.
In an interview, de Bever expressed mixed feelings about the deal.
One on hand it made good money for the 26 pension, endowment and government funds it manages as it roughly doubled its investment in Viterra over two years. But on the other, it means one less Canadian player on the world stage.
"We had hoped, frankly, that Viterra would become one of the global players," he said. "But clearly we were sort of overtaken by time."
De Bever said it's not his role to be "Mr. Canada or Mr. Alberta."
"But obviously I would like to see companies strong enough that they can hold their own on a global scale, and I think that's the thing that we have to work towards."
Under the deal, Agrium will pay $1.8 billion to buy the majority of Viterra's retail business. Its shares rose 2.2 per cent to $87.60 in on the TSX.
"The transaction is an excellent fit with Agrium's stated strategy of growing across the value chain by expanding both our retail and wholesale operations," CEO Mike Wilson said in a statement.
Richardson International will pay $800 million for 19 grain elevators and associated crop input centres as well a 25 per cent ownership interest in the Cascadia Terminal in Vancouver and other assets.
"Our agreement with Glencore will enhance both our grain handling and processing capacities, and help meet the growing needs of farmers in Western Canada," said Curt Vossen, president of Richardson International.
Viterra, formed by the merger of the Saskatchewan Wheat Pool and Agricore United, is a grain handler, marketer and food processor with operations across Canada, the United States, Australia, New Zealand and China.
The takeover offer comes as the company is poised to benefit from the end of the Canadian Wheat Board's monopoly on the marketing of wheat and barley in Western Canada.
The transaction will require approval by two-thirds of the votes cast at a meeting of Viterra shareholders expected to be held in May.
If the deal does not close for regulatory reasons, Glencore has agreed to pay Viterra $50 million.