13 Jun 2023
Viterra, Bunge to form agri-trading giant in $10.82 billion merger
Glencore PLC announced the sale of its agriculture division, including Viterra Ltd., to Bunge Ltd. for CAN$10.82 billion (US$8.2 billion). Viterra, a Canadian grain giant acquired by Glencore in 2012, had Glencore as its major shareholder with a 49.9% stake. The second-largest shareholder, Canada Pension Plan Investment Board (CPPIB), owning a 40% stake, backed the sale and will obtain a 12% share in the merged company and CAN$1 billion (US$800 million) in cash. British Columbia Investment Management Corp. (BCI) possesses the remaining 10% of Viterra.
Glencore supported the sale, citing the creation of a more diversified business with substantial synergy potential. The combined entity will derive 41% of its earnings from processing and 33% from merchandising and handling. Alongside the deal, Bunge announced a CAN$ 2.7 billion (US$2-billion) share buyback. After repurchasing, Viterra’s shareholders will hold 33% of the merged company.
Canada’s Competition Bureau will evaluate the Bunge-Viterra merger. Viterra had a successful year navigating the global agricultural market challenges, with S&P praising its performance in 2022 but forecasting normalized earnings in the near future. Viterra, part of Glencore’s global agricultural division since 2012, reported a net income nearing CAN$1.3 billion (US$1 billion) in fiscal 2022.
Following the deal's closure, the joint board will feature eight Bunge and four Viterra representatives. Both Glencore and CPPIB can nominate two board members each.
