The proposed acquisition of Cargill’s South Australian grain sites by Viterra has been withdrawn, preventing further consolidation of the bulk-handling industry in the Adelaide port zone and on Yorke Peninsula. While the reasons for the deal’s cancellation have not been disclosed by either company, industry speculation suggests that regulatory approval from the Australian Competition and Consumer Commission (ACCC) was unlikely.
The proposed deal would have seen Viterra taking control of all four of Cargill’s SA GrainFlow sites in Maitland, Crystal Brook, Mallala, and Pinnaroo, as well as ownership of Cargill’s mobile ship loader at Port Adelaide and the GrainFlow site at Dimboola in Victoria. This move would have significantly increased Viterra’s presence in the region.
The decision to withdraw the application for the acquisition was announced on December 16 by both Viterra and Cargill. Viterra informed its customers that they have consulted and agreed with Cargill to withdraw the application for review by the ACCC. This decision was made after considering the concerns raised by stakeholders, including Grain Producers South Australia (GPSA), regarding potential competition impacts and the condition of infrastructure at GrainFlow sites.
Brad Perry, CEO of GPSA, stated that they had participated in the ACCC’s public consultation on the proposed sale and had raised concerns on behalf of grain producers. However, they have not received any further details from Viterra or Cargill regarding the reasons behind the withdrawal. The ACCC confirmed that Viterra had informed them on December 13 that they would not proceed with the acquisition, and therefore the merger review was not concluded.
The ACCC website mentions a long-term agreement between Viterra Operations and Cargill, which came into effect on October 1, 2024, governing the terms of Cargill’s acquisition of capacity from Viterra Operations in the future. This agreement ensures that Cargill will have access to port terminal and up-country storage capacity as needed.
With Viterra already operating around 50 up-country sites in SA, export terminals on the Eyre and Yorke peninsulas, and sites in western Victoria, the withdrawal of the proposed acquisition will have implications for the grain handling and export industry in the region. The decision reflects the complex regulatory environment surrounding mergers and acquisitions in the agricultural sector, and highlights the importance of stakeholder consultation and regulatory compliance in such transactions.