Canada based agribusiness joint venture G3 Global Grain Group (G3) is set to acquire 50.1% stake in grain handler CWB for C$250m ($201m).
G3 is a joint venture between the Canadian subsidiaries of Saudi Agricultural and Livestock Investment Company (SALIC) and US grain trader Bunge.
The remaining stake will be held in trust for the benefit of Canadian farmers, with G3 having an option to purchase them after seven years. The transaction is expected to close in July 2015.
G3 CEO Karl Gerrand said: "As global demand for agri-products grows, consumers continue to demand the high quality grain produced by our Canadian farmers.
"Our vision is to establish a highly efficient coast-to-coast Canadian grain enterprise that provides stronger market access solutions for growers and delivers value to our stakeholders and the Canadian agriculture industry as a whole."
This new development is part of Saudi Arabia's effort to secure food supplies. The country is expected to rely completely on imported wheat within two years.
Since 2008, Saudi has started decreasing the domestic production due to lack of water resources.
According to the Canadian Grain Commission, the country has exported 378,000t of wheat and 126,500 tonnes of barley to Saudi Arabia during 2013 and 2014, Reuters reported.
Image: G3's acquisition of a controlling stake in CWB will support Saudi to secure food supplies. Photo: courtesy of dan/ freedigitalphotos.net.
