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Glencore PLC on Tuesday said its grain handling investee Viterra Ltd has struck an agreement to be acquired by New York-listed agricultural firm Bunge Ltd. The miner, which will surrender its 50% stake in Viterra, stands to receive $3.1 billion worth of Bunge shares and $1.0 billion in cash. It will hold a 15% stake in the combined group. Viterra is Glencore’s legacy agricultural business. Back in 2016, the Canada Pension Plan Investment Board and the British Columbia Investment Management Corp bought into the business, lowering Glencore’s stake to 50%. ‘The transaction would result in a larger, more diversified business, with significant synergy and re-rating potential,’ Glencore said, adding that it will not sell any of its Bunge shares in the 12 months after the deal is sealed. In total, Viterra shareholders will receive 65.6 million Bunge shares, worth $6.2 billion, and $2.0 billion in cash. Bunge said 75% of the consideration will come in the form of shares and 25% in cash. Bunge will assume $9.8 billion in Viterra debt. Bunge shares were 2.2% lower at $91.75 each during pre-market trade in New York on Tuesday. Glencore’s stock was up 3.7% at 452.95 pence each in London around midday and was up 4.7% at R 106.14 in afternoon dealings in Johannesburg. Viterra shareholders will own 30% of the enlarged firm, though this will rise to 33% once Bunge concludes a $2.0 billion buyback of its own shares. Glencore Chief Executive Gary Nagle said: ‘The merger of Viterra with Bunge is expected to realise 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. ‘The combined group would be a premier pure-play agribusiness solutions company, well placed to meet increased global demand as well as the ongoing challenge of providing sustainable, traceable food and feed products to customers around the world. This would be underpinned by a rigorous focus on creating value for all stakeholders.’ Glencore is also looking to do some deal-making of its own. On Monday, it said it mounted a bid to acquire Teck Resources Ltd’s steel-making coal business, after previous efforts to capture all of the New York-listed miner were rebuffed. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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