TORONTO/RIYADH – Saudi Arabia’s state-owned agricultural investment firm and U.S. grain trader Bunge Ltd will buy a controlling stake in Canadian grain handler CWB in a bold move by the Gulf state to secure food supplies.
G3 Global Grain Group, a joint venture of Bunge and Saudi Agricultural and Livestock Investment Co (SALIC), said on Wednesday it will buy a 50.1 percent stake in CWB for C$250 million ($201 million).
The remaining stake will be held in trust for Canadian farmers with G3 having an option to buy them out after seven years. Farmers owned an equity stake in CWB, formerly known as the Canadian Wheat Board, until the government stripped it of its Western Canadian grain monopoly in 2012.
Saudi Arabia began scaling back its domestic wheat-growing program in 2008, planning to rely completely on imports by 2016 to save water. SALIC was formed in 2011 by late King Abdullah to secure food supplies for the kingdom, mainly through mass production projects and foreign investment…