Glencore Sells Nearly 10 Percent Stake in Ag Business to BC Public Investment Fund

(courtesy Viterra)

Glencore has announced a deal to sell an additional 9.99 percent stake in its agriculture business, which include Regina-based grain company Viterra, to the British Columbia Investment Management Corporation (BCIMC).

The transaction is worth US$624.9 million and comes on the heels of Glencore’s agreement to sell a 40 percent stake in its ag business to the Canada Pension Plan Investment Board for US$2.5 billion, announced in early April. If both deals go through, Switzerland-based Glencore would own 50.01 percent of Glencore Agri.

“We are pleased to welcome another long-term partner into Glencore Agri who shares our vision to capture the significant opportunities we believe will emerge for Glencore Agri over coming years. These transactions highlight the superior value of Glencore Agri, with its advantaged asset footprint and business model, relative to its closest peers,” said Glencore CEO Ivan Glasenberg. “We are very excited that Glencore, as the largest shareholder in the business, will benefit from continued growth of the business with our new partners.”

BCIMBC operates a portfolio worth more than $123.6 billion on behalf of public sector clients in BC. The investment in Glencore’s ag business “provides an excellent opportunity for bcIMC to increase and diversify our exposure within the agricultural space, a sector we view as critical to supporting rising levels of global prosperity,” noted Lincoln Webb, senior vice president of infrastructure & renewable resources with BCIMC.

The deal values 100 percent of the equity in Glencore’s ag business at US$6.25 billion — slightly above the $6.2 billion that Glencore paid for Viterra in 2012.

Pending regulatory approvals, the agreement is expected to close in the second half of 2016.

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