The trading giant Glencore yesterday strengthened its grip on vital commodities by striking a deal to buy the biggest grain business in one of the world's biggest wheat exporters, Canada, for C$6.1 billion ($7.5 billion).
London Stock Exchange-listed Glencore, whose empire encompasses metals, minerals and food supplies, pulled off the deal for Viterra despite being in the throes of negotiating a £36 billion ($69.6 billion) takeover of the mining behemoth Xstrata.
Glencore has highlighted food as being one of its main targets for expansion. It will pay for the deal using its existing cash resources and credit facilities but will also sell on part of the business to two partners for C$2.6 billion, reducing the load.
Viterra handles about 45 per cent of Canada's grain and oilseed and owns almost all the grain storage facilities in South Australia.
Chris Mahoney, the head of agricultural products for Glencore, said: "This reflects our strong belief in the importance and future potential of the Canadian and Australian grain markets."
Viterra is seen as attractive for buyers now as Canada is poised to deregulate the grain industry next year.
Canada's prairies, where Viterra is based, are a top five global exporter of wheat and barley.