Bunge Ltd (NYSE:BG) has announced a deal to merge with Glencore PLC (LSE:GLEN) affiliate Viterra Limited in a stock and cash transaction that will create an agriculture giant.
The merged company would be worth about $34 billion including debt, according to a Reuters report.
The US grains merchants said in a statement that the combination will result in “an innovative global agribusiness company well positioned to meet the demands of increasingly complex markets and better serve farmers and end-customers."
“The combination of Bunge and Viterra significantly accelerates Bunge’s strategy, building on our fundamental purpose to connect farmers to consumers to deliver essential food, feed and fuel to the world,” Bunge CEO Greg Hickman said.
“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.”
Under a deal already approved by the boards of both companies, Viterra shareholders would receive approximately 65.6 million Bunge shares worth about $6.2 billion and around $2 billion in cash. Bunge will assume $9.8 billion of Viterra debt, which is associated with approximately $9 billion of highly liquid Readily Marketable Inventories.
Bunge also plans to repurchase its own shares to the value of $2 billion to enhance its per-share earnings.
“In combining our highly complementary origination, processing and distribution networks, we are better positioned to meet the increasing demand for the food, feed and fuel products we offer,” Viterra CEO David Mattiske added.
“Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business.”
The companies said the merger is expected to close in mid-2024, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by Bunge shareholders.
Contact the author at stephen.gunnion@proactiveinvestors.com