The Canadian federal government signed off Sunday on Glencore International PLC's bid to acquire Canadian agribusiness giant Viterra Inc, bringing the Swiss commodities supplier's multi-billion dollar transaction one step closer to completion.
The $6.1 billion bid was approved by Industry Minister Christian Paradis under the Investment Canada Act.
"I approve an application under the act if I am satisfied that the investment is likely to be of net benefit to Canada," Paradis said in a statement.
"Glencore has made a number of commitments to Canada."
Glencore released a statement Sunday emphasizing its commitments to investing in Regina-based Viterra's operations and to growing western Canada's agricultural industry.
"We are very pleased to receive Investment Canada approval, which recognizes the long-term benefits for farmers and Canada from our acquisition of Viterra," Chris Mahoney, Glencore's director of agricultural products, said in a statement released Sunday.
Glencore had said it expects to get all of the regulatory approvals it needs to close the transaction by the end of July.
Needs approvals in China, New Zealand, Australia
But it now suggests it may not meet that deadline as it waits for a review approval from the Ministry of Commerce in China, where Viterra has operations.
Glencore also requires final approval from New Zealand's Overseas Investment Office and Australia's Foreign Investment Review Board.
The company said it will provide an update on when it expects the deal to close "in due course."
Glencore has agreed to increase Viterra's projected capital expenditures in Canada by more than $100 million over five years and has said it will contribute to "grain industry initiatives" in Manitoba.
It has also committed to maintaining Viterra's Regina head office and said it will make the location the headquarters for its North American agricultural operations.
Glencore also plans to invest $8 million in Viterra's projected expenses in research and development and plans to work with the Saskatchewan government to establish a Global Institute for Food Security in the province.
Despite the company's assurances however, the Liberal party suggested the Conservative government hadn't done enough to determine if the deal was in the best interests of Canadians.
Deal 'rubber-stamped' in secret, says Goodale
"Flying in the face of their false promises about more transparency and accountability with respect to foreign takeovers, the Harper Conservatives have just rubber-stamped — again in secret on a Sunday afternoon — Swiss-based Glencore's takeover of Regina-based Viterra," Deputy Liberal Party leader Ralph Goodale, who represents a Regina-area constituency, said in a statement.
Goodale questioned if the Conservative government had received any binding commitments regarding Glencore's planned investments in Saskatchewan and its assurance of headquarters in Regina.
"The Harper Conservatives have had no answers," Goodale said. "It's all secret and the public interest has not been well served."
In 2010, the government blocked the $40 billion takeover of Saskatchewan-based Potash Corp by Australia's BHP Billiton, saying the deal was not of "net benefit" to the country.
The Glencore deal, however, has not suffered any similar setbacks.
Last month the Competition Bureau said it wasn't challenging the deal, though it is weighing Glencore's subsequent sales of Viterra assets to Calgary-based Agrium Inc. and Winnipeg-based Richardson International.
A U.S. statutory waiting period for antitrust review has expired, and Australia's competition watchdog has approved the transaction.
The deal also has the blessings of shareholders and the Ontario Superior Court of Justice.