Glencore said it will receive US$4.1bn for its 50% stake in grain, corn and soybean trader Viterra (TSX:VT), which announced today it is to merge with vegetable oils giant Bunge to create a US$34bn agribusiness powerhouse.
Under the terms of the agreement, Glencore will receive approximately US$3.1bn in Bunge stock and US$1bn in cash for its c50% stake in Viterra (TSX:VT), which will give it a round 15% of the enlarged group.
Glencore has agreed not to sell any stock in Bunge for a period of 12 months following the completion of the merger and thereafter only to carry out “orderly” sales.
Gary Nagle, Glencore’s chief executive, 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.”
A combined Bunge-Viterra would have three oilseed processing plants in Ukraine, in Kharkiv, Dnipro and Mykolaiv.
Shares in Glencore rose by 4.3% to 455.6p.