Agriculture and commodities company Bunge is merging with Viterra, a company owned by Glencore, Canada Pension Plan Investment Board (CPP Investments) and British Columbia Investment Management Corporation (BCI), to create a global agribusiness.
NYSE-listed Bunge said it has agreed to merge with Viterra in a stock and cash transaction by offering Viterra shareholders 65.6m shares of Bunge stock worth $6.2bn (€5.7bn), and $2bn in cash.
Bunge will also assume $9.8bn of Viterra debt, which it said is associated with approximately $9bn of highly liquid readily marketable inventories. In addition, Bunge intends to buy back $2bn of Bunge’s stock in line with its share repurchase plan.
The merger gives the Viterra shareholders 30% of the combined company which will increase to 33% once the share repurchase plan completes.
Glencore will receive approximately $3.1bn in Bunge stock and $1bn in cash for its 50% stake in Viterra. CPP Investments, which has held a 40% stake in Viterra since 2016, said it will receive around 12% equity position in the combined company and $800m in cash once the deal closes. BCI owns a 10% stake in Viterra.
Gary Nagle, Glencore’s CEO said the combined group would be a premier pure-play agribusiness solutions company, well placed to meet increased global demand as well as the ongoing challenge of providing sustainable, traceable food and feed products to customers around the world.
Combining the two complementary companies will create an “enhanced agribusiness that can provide an expanded product offering to end-customers, with an increased ability to innovate and promote sustainable practices” in the global food supply, said Bruce Hogg, MD and head of sustainable energies at CPP Investments.
Lincoln Webb, EVP and global head of BCI’s infrastructure and renewable resources, said: “In the context of climate change and the need for greater food security, we believe the proposed combination of Viterra and Bunge creates a compelling agricultural and food platform – allowing for enhanced investment in global supply chain resiliency and sustainable food production practices.
“As a long-term responsible institutional investor, we look forward to the leading role the new company will take in the future of agriculture.”
Bunge is an oilseed processor and producer and supplier of specialty plant-based oils and fats with 300 facilities located in more than 40 countries. Viterra, which provides a network of agricultural storage, processing and transport assets, operates in 37 countries.
Greg Heckman, Bunge’s CEO, said: “Our highly complementary asset footprints will create a network that connects the world’s largest production regions to areas of fastest growing consumption, enhancing the geographical balance and adaptability of our global value chains and benefitting farmers and end-customers.”
David Mattiske, Viterra’s CEO, said: “Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business.”
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