Bunge, Viterra merging in agriculture megadeal

By Ovunc Kutlu

ISTANBUL (AA) - American agribusiness and food company Bunge announced Tuesday that it has agreed to merge with Netherlands-based global grain trader Viterra in a stock and cash megadeal.

"The merger of Bunge and Viterra will create an innovative global agribusiness company well positioned to meet the demands of increasingly complex markets and better serve farmers and end-customers," the company said in a statement.

"With an enhanced global network, the combined company’s increased diversification across geographies, seasonal cycles and crops will increase optionality in managing risk and increase resiliency," it added.

As part of the deal, which was unanimously approved by both firms' boards of directors, Viterra shareholders will receive around 65.6 million shares of Bunge stock with a total value of approximately $6.2 billion, in addition to $2 billion in cash.

Bunge will also assume $9.8 billion of Viterra’s debt, while Viterra shareholders will own 30% of the combined company after the transaction closes.

While Bunge's market value stood at $14.5 billion on Tuesday at the close of the New York Stock Exchange, Viterra's implied valuation under the merger is around $8.1 billion.

While Missouri-based Bunge has 23,000 employees located in more than 40 countries, Viterra has over 17,500 workers across 37 countries, according to the statement.

Viterra in 2013 was purchased for $6.1 billion by Glencore International, the Swiss multinational commodity trading and mining firm.

Glencore, in a separate statement, said it will receive approximately $3.1 billion in Bunge stock and $1 billion in cash for its 50% stake in Viterra and later hold a 15% share in the combined group.

The firm said the transaction would result in "a larger and more diversified business" as the combined group would be "a premier pure-play agribusiness solutions company" placed to meet increased global food demand.

In 2016, the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation acquired interests in Viterra, reducing Glencore’s stake to 50%, it noted.