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Bunge buys into canola, pea protein maker Merit

Agribusiness giant takes quarter stake in processor

merit foods
Artist's rendering of the Merit Functional Foods plant under construction in Winnipeg. (Merit Foods graphic)

One of the world’s biggest grain companies is getting in on a processing facility under construction in Winnipeg to extract plant-based proteins from canola and peas.

Winnipeg-based Merit Functional Foods announced Thursday it has received a $30 million “capital investment” from Bunge, giving the U.S. grain firm a “minority interest” worth 25 per cent.

Burcon NutraScience Corp., a joint-venture owner in Merit, said in a separate release Thursday that Bunge bought equity directly from Merit as well as additional shares and debt from other “existing Merit shareholders who are Burcon’s joint venture partners.”

Bunge’s acquisitions make Vancouver-based Burcon the largest single shareholder in Merit, at 33.3 per cent, Burcon said.

The deal announced Thursday also includes an agreement between Bunge, Burcon and Merit’s other shareholders in which Burcon now has the “right, but not an obligation” in “certain circumstances” to take part in a sale of “not less than all” of its Merit shares.

Also “in certain circumstances,” Merit has the right to buy out from Burcon its May 2019 license and production deal, in exchange for an amount “representing the discounted future royalties over the life of the license agreement.”

The agreement in question granted Merit a 20-year exclusive license for Burcon’s pea and canola protein technologies. The Merit plant is to be set up to make Burcon’s Peazazz and Peazac pea proteins and Supertein, Puratein and Nutratein canola proteins.

Having Bunge on board, Merit said Thursday, “will expedite the construction of Merit’s state-of-the-art plant-based protein production facility” which is billed as “the only commercial-scale facility capable of producing food-grade canola protein in the world.”

Construction of the Merit plant in Winnipeg remains “well underway” and on track for the plant to be “fully operational” by December.

Merit’s said its product portfolio of pea and canola protein ingredients “supports the growing need for highly functional and taste-forward plant-based applications.”

Bunge, as one of the “leading processors of canola in Canada… has strong origination expertise and will supply Merit with critical inputs,” Merit said.

“We’re excited to have a global partner like Bunge recognize our mission and assist us in accelerating our plans and path to launch,” Merit co-CEO Ryan Bracken said in the company’s release.

“Bunge also holds a deep knowledge of international commodity markets, which will help reinforce our canola business with customers globally.”

Burcon CEO Johann Tergesen said much the same in that company’s release, that Bunge’s investment “secures the future for Merit, which will benefit greatly from Bunge’s large canola origination footprint and multinational platform.” — Glacier FarmMedia Network

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