By Rod Nickel
WINNIPEG, Manitoba, Nov 26 (Reuters) - CWB, formerly knownas the Canadian Wheat Board, has agreed to buy grain handlingassets from Upper Lakes Group, giving it flexibility to move thecrops it buys off the Canadian East Coast.
The deal, announced Tuesday, includes Mission Terminal Inc,which has a terminal at Thunder Bay, Ontario; a grain facilityat Trois-Rivieres, Quebec; and a stevedoring service.
The purchase price was not disclosed. The deal is scheduledto close on Dec. 31.
Winnipeg, Manitoba-based CWB markets wheat, durum, barley,canola and peas, under the control of the Canadian government,which is guaranteeing its borrowings until it is sold ordevelops a plan to be self-sustaining.
Ottawa dismantled the Wheat Board's 69-year-old marketingmonopoly over Western Canadian wheat and barley in August 2012.It agreed to temporarily back CWB but required it to produce aplan to privatize within four years.
CWB lacks a network of country elevators to buy cropsdirectly from farmers, or port terminals to store them untilthey can be loaded onto ships for export. That has left CWB toarrange agreements with Canada's grain handlers, who includeRichardson International, Viterra and Cargill Ltd
Acquiring Mission Terminal allows CWB to buy grain directlyfrom farmers and move it onto ships bound for the AtlanticOcean.
"The purchase of these companies is a first step in buildingand securing CWB a strong position in the grain marketing supplychain," said CWB president and CEO Ian White in a statement.
Mission Terminal Thunder Bay stores 136,500 tonnes of grain,while Les Elevateurs des Trois-Rivieres can store 110,000tonnes.
The deal is not surprising, said analyst Chuck Penner ofLeftField Commodity Research, given the CWB's establishedworking relationship with Mission Terminal, which is led byformer Wheat Board Chief Executive Adrian Measner.
"There really aren't that many small players for them topick off," Penner said. "They have limited opportunities thatway."
- Investment & Company Information
- Canadian Wheat Board