Bunge, Viterra to Merge to Create Global Agribusiness Giant
The agricultural and food company says complementary assets will position it to meet growing demand
U.S. grain trader and oilseed processor Bunge BG 0.18%increase; green up pointing triangle agreed to acquire Glencore GLNCY 0.64%increase; green up pointing triangle-backed Viterra for $8.2 billion in a deal that would create one of the world’s largest agricultural companies.
Under the terms of the deal, Bunge will pay Viterra shareholders about 65.6 million shares valued at $6.2 billion and about $2 billion in cash. Bunge will also assume $9.8 billion of Viterra’s debt. The combined company will be led by Bunge Chief Executive Greg Heckman.
“Our highly complementary asset footprints will create a network that connects the world’s largest production regions to areas of fastest growing consumption,” Heckman said in a statement Tuesday.
The deal is expected to close in the middle of next year.
The planned combination of the two grain shippers comes as agriculture traders, including Bunge, have reaped larger profits over the past year following Russia’s invasion of Ukraine, which sent grain prices soaring.
For Bunge, which has a market value of about $14 billion, swallowing Viterra would put it on par with its biggest rivals, Archer Daniels Midland and Cargill, with more than $100 billion in annual revenue.
Bunge is one of the world’s largest grain traders, directing shipments of corn, soybeans, wheat and other food commodities around the globe. St. Louis-based Bunge, ADM, Cargill and Louis Dreyfus make up the so-called “ABCDs” of global commodity trading that dominate the sector.
Bunge reported $67 billion in annual sales in its 2022 fiscal year while Viterra had $54 billion in revenue. Bunge’s rival ADM reported $102 billion in revenue for its 2023 fiscal year and privately held Cargill posted $165 billion.
The companies said the merger is expected to generate about $250 million in savings within the first three years of completing the deal. Bunge said that it also plans to repurchase about $2 billion of its own stock. After the transaction closes, Viterra shareholders are expected to own about 30% of the newly combined entity.