2023-06-08 20:20:16
© Reuters.
By Abigail Summerville and Anirban Sen
NOVA YORK (Reuters) – A Bunge (NYSE:), a US grain trader, is putting the finishing touches on an agreement to merge with Viterra, a company that owns Glencore (LON:) as a shareholder, and create an agricultural trading giant worth more than $30 billion, including debt, people familiar with the matter said on Thursday.
The deal comes as Russia’s war in Ukraine tests security of supply in global food markets, with the potential impact of the deal coming under scrutiny by antitrust regulators.
Bunge, which is valued at around $14 billion and has net debt of around $2.7 billion, will pay most of the deal with equity but will also use cash and has already secured financing from banks, they said. the fonts. Bunge’s management team, led by Chief Executive Greg Heckman, will oversee the combined company, the sources added.
Viterra’s private shareholders, which in addition to Glencore include the Canada Pension Plan Investment Board and British Columbia Investment Management Corp, could sign the deal as early as this weekend if talks conclude successfully, the sources said.
While the deal is on track to be announced next week, there is always the possibility it could be scrapped at the last minute, the sources warned. The final value of the deal may vary based on the movement of Bunge shares at the time the deal is signed, according to the sources.
Glencore and Viterra had no immediate comment. Bunge did not immediately respond to requests for comment.
Trade in basic products such as , and , is already concentrated between Bunge and three other large companies – Archer-Daniels-Midland , Cargill and Louis Dreyfus. Collectively known as “ABCD,” these companies have been making big profits after the war in Ukraine disrupted shipments and sent crop prices soaring.
Last year, Bunge was ranked as the largest exporter of corn and soybeans from Brazil, which is the world’s main source of basic crops for the manufacture of animal feed and biofuels, according to data from transport agent Cargonave. Viterra was the third largest exporter of corn and the seventh largest exporter of soybeans.
The Viterra acquisition will bring Bunge’s 2022 revenues of $67.2 billion in line with Archer-Daniels-Midland, which posted sales of nearly $102 billion last year. The deal will also boost Bunge’s grain export and oilseed processing business.
This is not the first attempt at an agreement. In early 2017, Viterra, then known as Glencore Agriculture, attempted a takeover of Bunge, which was valued at $11 billion. In May 2017, Bunge rejected Glencore after the latter made an informal approach to discuss “a possible consensual business combination”
Viterra expanded its US grain buying and selling business through its $1.1 billion acquisition of Gavilon last year.
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