Bunge and Viterra have reached an agreement that would see the two global agribusinesses unite under the Bunge name.
Bunge and Glencore — which owns 50 per cent of Viterra — announced the cash and stock transaction early Tuesday (June 13.)
The deal values Viterra at approximately US$8.1 billion, and would see Glencore receive approximately $3.1 billion in Bunge stock and $1.0 billion in cash for its stake. Glencore would own 15 per cent of the combined company after it closes.
The Canada Pension Plan Investment Board, which holds a 40 per cent stake in Viterra, says it would receive a 12 per cent position after the merger, as well as $800 million in cash, while the B.C. Investment Management Corp would hold a 3 per cent stake after the merger.
Assuming the deal goes ahead, the two companies would operate under the Bunge name, with headquarters in St. Louis, Missouri.
The board of directors would have eight directors nominated by Bunge and four representing Viterra’s shareholders. The company would be led by Greg Heckman, Bunge’s chief executive officer, and John Neppl, Bunge’s chief financial officer, with Viterra CEO David Mattiske joining the Bunge executive leadership team in the role of co-chief operating officer.
“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,” Heckman says, in a news release. “With a diversified global mix of earnings across processing, handling and merchandising, and value-added products, we will increase the resiliency of our cash flow generation.”
The merger is expected to close in mid-2024, subject to shareholder and regulatory approvals.
The deal will face scrutiny from anti-trust regulators, including Canada’s Competition Bureau.
Bunge owns a 25 per cent stake in G3 Global Grain Group, which operates grain elevators in the same areas of the Prairies as Viterra. Both Viterra and Bunge also own canola crush facilities in Western Canada, with Viterra having announced plans for a large new crush facility in Regina, Sask.
Viterra was originally formed in 2007 when the Saskatchewan Wheat Pool acquired Agricore United. It was bought by Glencore in 2012 for C$6.1 billion.