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WINNIPEG – The federal government is privatizing the Canadian Wheat Board with a sale to a Saudi-owned company.

G3 Global Grain Group will get 50.1 per cent of the company in exchange for an investment of $250 million. The other 49.9 per cent will be kept in trust for farmers who deliver grain to the board.

Any farmer who does deliver will get $5 per tonne in equity in the organization. In seven years, G3 Global Grain Group has the option to buy back the shares from farmers at market value.

READ MORE: Supreme Court won’t hear appeal of group seeking to sue Ottawa over CWB

G3 is a joint venture between Bunge Canada, and SALIC Canada, a subsidiary of Saudi Agricultural and Livestock Investment Company.

The board says the agreement will see development of a new coast-to-coast grain processing and shipping network in Canada. It says the deal will also increase Canada’s ability to export grain, create jobs and spawn economic growth in the Prairies.

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“By bringing together these great companies we are creating a powerful new player in the western Canadian grain space, offering farmers greater choice and securing better access to international customers,” G3 President and CEO Karl Gerrand said in a release.

Terms are expected to be finalized June 1.

The NDP accused the government of “giving away” the wheat board “free of charge” when rumours spread in December that the Conservatives were planning to sell off the board in exchange for an investment in the company. At the time, the government said partnering with an investor would help make the board “a viable marketing option” for Canadian farmers.

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Agriculture Minister Gerry Ritz said lifting the monopoly attracted a number of potential investors.

“This investment deal offers Canadian farmers access to a new global player to compete for their grain and more delivery points for farmers to sell their grain,” he said in a statement. “The result of these new investments and jobs will provide a huge economic benefit to the grain sector and Canada’s overall economy.”

Since the 1940s, Prairies farmers have had to sell their wheat and barley to the board, which in turn exported it to foreign markets. Despite vocal opposition and several lawsuits, the federal government went ahead with a long-standing promise to abolish the monopoly three years ago.

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A proposal that would have seen a farmer-owned entity acquire the wheat board was rejected by the board last year.