LONDON, UK: Glencore plc, along with the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation, shareholders of Viterra Limited, have reached an agreement with Bunge Limited to merge Bunge and Viterra, creating a leading global agribusiness solutions company.
The announcement was made by Bunge today, highlighting the cash and stock transaction involved in the merger.
As per the agreement, Glencore will receive approximately $3.1 billion in Bunge stock and $1.0 billion in cash for its 50% stake in Viterra, resulting in Glencore holding approximately 15% in the combined group.
The merger aims to establish a larger, more diversified business with significant potential for synergy and re-rating.
Glencore has committed to not selling any Bunge stock for 12 months following the completion of the merger, with subsequent sales to be conducted in an orderly manner. Glencore will periodically review its strategy concerning the shareholding.
The completion of the merger is subject to customary closing conditions, including regulatory approvals and approval by Bunge shareholders. It is expected to finalize by mid-2024.
Gary Nagle, CEO of Glencore, expressed optimism about the merger, stating, “The merger of Viterra with Bunge is expected to realize significant value for Glencore. Our investment in the agriculture sector dates back over 40 years and has grown from being a small grains trader to being part of a world-leading, fully integrated global agriculture network.”
Nagle further emphasized that the combined group would become a premier pure-play agribusiness solutions company, well-positioned to meet the growing global demand for sustainable and traceable food and feed products. The focus would be on creating value for all stakeholders involved.
Viterra, Glencore’s vertically integrated business in the global agricultural product value chain, will be merged with Bunge.
In 2016, the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation acquired interests in Viterra, reducing Glencore’s stake to approximately 50%. Viterra recorded gross assets of $23.5 billion as of December 31, 2022, generating revenue of $53.9 billion, EBITDA of $2.6 billion, and profit before tax of $1.4 billion in the same year.
The merger values Viterra at $8.1 billion. The senior management team of Viterra includes CEO David Mattiske, CFO Peter Mouthaan, and Executive Directors for Global Markets Francis Mardon and Bas van Hoorn.