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G3 Global Grain Group completes investment in CWB

Combination of CWB and Bunge Canada’s grain assets to form new Canadian agribusiness

WINNIPEG, July 31, 2015/PRNewswire/ – G3 Global Grain Group (G3), a newly established agribusiness joint venture based in Winnipeg, Manitoba, Canada, today announced a successful close to its investment in CWB which secures a majority interest in the company. CWB will be combined with the grain assets of Bunge Canada(1) to form a new Canadian agribusiness, G3 Canada Limited.

“Combining the local market presence and global expertise of CWB and Bunge Canada Grain provides the opportunity to fulfill a promise to Canadian producers – to create a new and competitive alternative for the marketing of their grain,” says Karl Gerrand, G3 CEO. “The name change to G3 Canada Limited represents another step towards our vision of building a highly efficient coast to coast grain handling enterprise, and I welcome the opportunity to work with the dedicated teams from G3, Bunge Canada and CWB, who have worked so hard to bring these transactions to a successful conclusion.”

Ian White, CWB President and CEO, led the organization through the transformational process, and is gratified with the investment outcome. “CWB is pleased to complete the initiative to commercialize. The capital investment G3 brings, as well as extensive operational experience, is a huge benefit to the sector, and we are pleased that Canadian grain producers will be able to continue to participate in the growth of the new company.”

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About G3 Canada Limited
G3 Canada Limited, a newly formed agribusiness, is establishing a highly efficient coast-to-coast Canadian grain enterprise designed to provide a unique competitive alternative to farmers, and superior service to customers and stakeholders. G3 Canada’s assets range from inland grain and deep-sea port terminals stretching from Leader, Saskatchewan to Québec City, Québec, to Great Lake grain transport vessels and a fleet of grain hopper cars. The vertical integration of these assets along the agricultural commodity chain forms the basis of a smarter path from Canadian fields to global markets. G3 Canada Limited is a Canadian company and is headquartered in Winnipeg, Manitoba

About G3 Global Grain Group
G3 Global Grain Group is a joint venture of Bunge Canada and SALIC Canada Limited, a wholly owned subsidiary of Saudi Agricultural and Livestock Investment Company (SALIC). Bunge Canada is a vertically integrated food and feed ingredient company, supplying raw and processed agricultural commodities and specialized food ingredients to a wide range of customers in the animal feed, food processor, foodservice and bakery industries. SALIC, a joint stock company based in Riyadh, Saudi Arabia, is building a global agribusiness by investing in greenfield and existing ventures.

G3 Media contact:
Jeremy Twigg
Jeremy.Twigg@fleishman.ca
Phone: 604-630-0395

(1) Bunge Canada’s existing oilseed processing operations remain with Bunge Canada, and are not part of the investment transaction being announced.

Frequently Asked Questions

1. What is being announced?

G3 Global Grain Group (G3), a newly established agribusiness joint venture based in Winnipeg, Manitoba, Canada, today announced a successful close to its investment in CWB which secures a majority interest in the company. CWB will be combined with the grain assets of Bunge Canada(1) to form a new Canadian agribusiness, G3 Canada Limited.

Today’s close signals a successful conclusion to the CWB’s commercialization – a transformational process which began in early 2012.

The process of renaming CWB and Bunge Canada assets acquired by G3 will begin immediately, but is expected to take place over a multi-month transition period.

(1) Bunge Canada’s existing oilseed processing operations remain with Bunge Canada, and are not part of the investment transaction being announced.

2. With the transaction complete, what assets has G3 acquired?

Through G3’s strategic investments, G3 Canada Limited’s assets presently include a network of seven grain elevators in Western Canada, four grain elevators in Québec, port terminals in Québec City, Québec; Thunder Bay, Ontario, and Trois-Rivières, Québec, two Equinox Class Lakers (Great Lake grain transport ships), nearly 200 kms. of short-line rail track in Saskatchewan, and SML Stevedoring Services at Les Élévateurs des Trois-Rivières. In addition to this, G3 Canada Limited also owns four state-of-the-art grain handling facilities under development in Bloom and St. Adolphe, Manitoba, and Colonsay and Pasqua, Saskatchewan, as well as one of Canada’s largest private fleets of grain hopper cars. At the date of the transaction close (July 31), the inland terminal at Bloom has opened, and the terminal at Colonsay is scheduled to open in August, 2015. 

3. Why does this transaction make sense?

Canada is one of the world’s largest exporters of core agricultural commodities such as wheat, canola and barley.  It was clear that completion of the CWB commercialization process would mean Canadian farmers would have greater freedom of choice around when and who to sell their products. This is a new market dynamic that G3 was keen to be a part of: greater competition that benefits farmers and our new agribusiness.

 4. Does this transaction signal specific benefits for Canadian farmers?

Combining the local market presence and global expertise of CWB and Bunge Canada (grain) provides the opportunity to fulfill a promise to Canadian producers – to create a new and competitive alternative for the marketing of their grain. The creation of G3 Canada Limited also extends a program whereby producers can participate in a Trust. The Farmer Equity Plan is the only opportunity in Canada that enables producers to gain a significant equity interest in a growing Canadian grain handler.

5. With this transaction what happens to the CWB’s Farmer’s Equity Plan?

The investment announced today results in G3 acquiring a majority ownership interest in CWB, with a significant minority ownership interest to be held in trust for the benefit of farmers.

The Farmer Equity Trust, which is operationalized as the Farmer Equity Plan and was launched in 2013, rewards producers who have delivered grain since August 2013 with $5.00 of trust units per every tonne of Canadian grain purchased. The Farmer Equity Plan (FEP) is the only opportunity in Western Canada that enables producers to gain a significant equity interest in a growing Canadian grain handler. In the coming weeks new Trustees for the FEP will be announced, along with more details on how Western Canadian farmers can benefit.

6. Is participation in the Farmer Equity Plan open to all grain producers?

At the current time, the FEP is available only to Western Canadian producers. As with all trust programs, there are a number of principles which will be developed to guide such elements as FEP participation, growth, ownership percentages, valuations, and redemption. FEP Trustees will be named in coming days, and those Trustees will ensure FEP Trust details are fully defined.

7. Are there specific benefits to international buyers of grain?

G3 Canada Limited is a significant new competitor for – and marketer of – Canadian grain. Immediate benefits to buyers will include expanded grain origination and export capabilities. Beyond this, G3 will leverage the knowledge and experience of the staff of the two organizations to improve logistics between our respective assets in order to move grain to export position more efficiently for the benefit of our customers.

In addition, G3’s ownership and operation of two facilities on the St Lawrence River will support increased operational flexibility from which to serve our export customers on Atlantic shipping routes.

8. What is G3 Global Grain Group?

G3 Global Grain Group is a newly formed Canadian agribusiness that is the successful investor in the CWB and is the parent company of G3 Canada Limited.

G3 is a joint venture between Bunge Canada (Bunge) and SALIC Canada Ltd, a wholly owned subsidiary of Saudi Agricultural and Livestock Investment Company (SALIC), formed to invest in Canada’s agricultural grain industry by establishing a highly efficient coast-to-coast grain enterprise.

9. Who are the Joint Venture partners?

Bunge is a nearly 200 year old global agrifood company with more than 400 locations in 40 countries including a strong presence in Eastern Canada through its export terminal in Quebec City and oilseed processing plants throughout the country. 

SALIC is Saudi Arabia’s principal agricultural investment enterprise, which has a broad and global mandate to use Saudi Arabia’s financial resources to expand agricultural capacity in countries with potential and that are open to foreign investment.

G3 combines the expertise and resources of these two global organizations to provide more choice to Canadian producers by expanding international trade from the region.

10. What impact does this transaction’s close have on existing client/customer relationships?

Completion of the commercialization process will take place over a multi-month transition period and will have few immediate impacts on existing market relationships held with either the former CWB or former Bunge Canada (grain) operations. Over time, there will be an increasing number of visible changes, which will include revisions to key documents, reflecting G3 Canada and CWB, or G3 and Bunge brands, until the orderly transition to G3 Canada Limited is complete.

11. Why are you transitioning away from the CWB name to G3 Canada?

The decision to rename CWB and Bunge Canada grain assets to G3 Canada Limited was not taken lightly. Lengthy discussions between business optimization and leadership teams highlighted the fact that G3’s investment in Canada’s agricultural sector represents a unique opportunity. Combining the generational knowledge, local relationships and global reach of CWB and Bunge Canada provides a chance to fulfill a promise to the market – a promise to create a new and competitive alternative for the marketing of Canadian grain. Renaming or ‘branding’ combined G3, CWB and Bunge Canada grain assets as G3 Canada Limited signals that a change has taken place and we can start to work on moving the organization forward.

To that end, G3 executives (former CWB and Bunge Canada senior managers) are now engaging in a process of reviewing structural assets, liaising with employees, harmonizing operational practices, and conducting outreach to inform key audience and market groups about the new name, and ownership changes.

12. Will there be any changes in the management of CWB/G3 Canada Limited?

Karl Gerrand is CEO of G3 Canada Limited. Ward Weisensel and Bill Mooney will remain with G3 in senior commercial and operational roles, while Brita Chell has been named CFO of G3, providing continuity in leadership for the combined organization. Ian White, CWB President and CEO and Dayna Spiring, Chief Strategy Officer – who were both instrumental in helping to complete this transaction, and to whom we are deeply indebted for their respective contributions – will be departing G3 to pursue new personal challenges.

13. Is G3 Canada Limited also responsible for the feasibility study on a New Export Grain Terminal in Vancouver?

G3 Global Grain Group’s affiliate – G3 Global Holdings- announced intentions to study the feasibility of an export grain terminal at Port Metro Vancouver.

14. Where will G3 Canada Limited be headquartered?

G3 Canada Limited is a Canadian company with a Canadian management team, and we will be headquartered in Winnipeg, Manitoba.

15. Who will comprise the G3 Canada Limited Board?

The Board of Directors for G3 Canada Limited will be comprised of representatives from joint venture investor companies Bunge and SALIC, as well as members of the Farmer Equity Trust.

16. Who will be the Trustees of the Farmer Equity Trust?

Details about Trustees will be announced in August, 2015.

17. Were regulatory approvals required in order to conclude this transaction?

Standard regulatory approvals commensurate with business transactions of this nature were required in order for G3’s investments to close. This process included multiple levels of legal and regulatory reviews, including oversight by Investment Canada and the Canadian Competition Bureau.

18. How does my relationship with CWB/Bunge Canada (grain) change now that this transaction has closed?

The July 31, 2015 transaction close will trigger few if any changes to existing CWB and/or Bunge Canada (grain operation) relationships. Existing contracts, standing orders and agreements will remain the same and will be honoured. The exception to our ‘no immediate change’ message is that the market will see minor changes which will be made to corporate branding (meaning, logos, or business names) on standard forms which will shift from strictly CWB or Bunge Canada to G3 Canada Limited. There may also be near-term changes to the Bunge Canada grain operations acquired by G3, in order to comply with regulatory requirements.

Over an expected multi-month transition period, G3 executives (former CWB and Bunge Canada senior managers) will engage in a process of reviewing structural assets, liaising with employees, harmonizing operational practices, and conducting outreach to inform key audience and market groups about the new name, and ownership changes. As the process unfolds, business contacts should continue to work within the regular relationships held with CWB and/or Bunge employees.

G3 will continue to keep key audiences in the Canadian agricultural sector informed of transition progress, and will do our best throughout to minimize any downside impacts on our valued customers, suppliers, partners or producers.

July 31, 2015