China approves Glencore-Viterra $6.2 bn deal

Chinese regulators finally approved commodities giant Glencore International's $6.2-billion proposed acquisition of Canada's largest grain handler Viterra Inc, the last regulatory nod, nine months after the deal was announced.

The approval from China came on the same day that Canada approved the highly controversial acquisition of its oil and gas explorer Nexen Energy by Chinese-state-owned oil giant Cnooc for $15.1 billion, China's largest ever overseas acquisition (See: Canada approves Cnooc-Nexen $15.1 bn deal).

Regina, Saskatchewan-based Viterra yesterday said that China's ministry of commerce has approved the takeover, which will be completed by 17 December.

Baar, Switzerland-based Glencore, which is also seeking Chinese approval for its proposed $33 billion acquisition of Swiss mining giant Xstrata Plc, had said in July that Canada had approved the March announced Viterra deal, and extended closing of the transaction twice in August and in September awaiting China's approval.

In order to obtain Canadian approval, Glencore had smartly taken on board two Canadian companies as partners to the Viterra deal and pledged to keep Viterra's headquarter in Regina in order to avoid concerns over foreign ownership of Canadian resource companies.

Analysts had said that Glencore's decision to rope in Agrium and Richardson in the deal, and to use Regina as North American headquarters for the business, could remove the risk of the deal being blocked.