Bunge and Viterra Merge to Create Ag Giant

U.S. grains merchant Bunge and Glencore-backed Viterra are merging to create an agricultural trading giant worth about USD34bn including debt, the companies said, in a deal that will likely draw close regulatory scrutiny, according to Reuters.

The deal brings the combined company closer in global scale to leading rivals ADM and Cargill, valuing Bunge and Viterra at about USD17bn each. Bunge shareholders, however, will own about 70% of the company, because Bunge will pay for a significant chunk of the deal with cash.

The deal is unprecedented in size in the global agriculture sector. It comes after Bunge posted record adjusted profits in 2022, benefiting from tight global grain supplies due to the war with Ukraine.

Bunge shares rose more than 2% following the announcement.

Under the deal, Viterra shareholders will get about 65.6 million shares of Bunge stock, carrying a value of about USD6.2bn, and about USD2bn in cash.

Bunge will also assume USD9.8bn of Viterra’s debt, according to a joint statement. Viterra shareholders will own 30% of the combined company following the deal’s expected close in mid-2024.

“The companies are highly complementary,” Chief Executive Greg Heckman told Reuters. “The way the assets and teams fit together, the strategic merit is one that we’ve looked at for years … Things just finally aligned.”

Bunge is already the world’s largest oilseed processor and analysts said it and Viterra’s crushing businesses could face regulatory scrutiny in Canada, Argentina and elsewhere.