Bunge Completes $8 Billion Merger with Grain Trader Viterra

By Ryan Hanrahan

Bloomberg’s Michael Hirtzer reported that “Bunge Global SA completed its takeover of Glencore Plc-backed Viterra, a move that will help the combined businesses better compete with larger rivals like Cargill Inc. and Archer-Daniels-Midland Co. as the crop-trading sector faces a downturn in profits.”

“First announced about two years ago, Bunge had initially sought to close the deal by mid-2024, but was held up as it awaited antitrust approvals from various regions,” Hirtzer reported. “The transaction now is closed, Bunge said in a Wednesday statement, weeks after receiving crucial support in China.”

“Bunge, the world’s biggest oilseed processor and the B in the quartet of agricultural powerhouses known as the ABCDs, has been pressured as ample world harvests weigh on commodities prices, while US President Donald Trump’s trade disputes threaten demand,” Hirtzer reported. “Viterra’s vast network of storage facilities, port terminals and vessels should broaden Bunge’s trading opportunities.”

“‘Today is a defining moment for our company,” Bunge Chief Executive Officer Greg Heckman said in the statement,” according to Hirtzer’s reporting. “‘Now, we begin the exciting work of bringing our teams and operations together.’”

Merger Terms

Progressive Farmer’s Todd Neeley reported that “the terms of the merger announced in 2023 includes Viterra shareholders receiving about 65.5 million shares of Bunge stock valued at around $6.2 billion along with about $2 billion in cash. As part of the deal, Bunge will assume $9.8 billion of Viterra debt. Additionally, Bunge announced plans to repurchase about $2 billion in Bunge stock.”

“Before the merger, Viterra specialized in grain handling and marketing, and was one of Canada’s largest agri-product retailers with more than 250 retail locations in Western Canada and 17 in Australia. Viterra is the largest producer of industrial oats in North America,” Neeley reported. “Combined, the two companies will have more than 50,000 employees worldwide and total revenues north of $100 billion.”

“Viterra lists 105 facilities in the U.S and 76 across Canada, concentrated in Saskatchewan,” Neeley reported. “Bunge, now based in St. Louis, Missouri, before the merger listed more than 300 grain and oilseed processing facilities in more than 40 countries. Bunge reported operating 56 crush plants with 57 million metric tons (mmt) of capacity, 26 port terminals, 47 oil refineries and 17 grain mills.”

“Also prior to the merger, Viterra listed that it operated more than 30 processing and refining facilities, as well as 29 port terminals along with more than 200 ocean vessels. Viterra reports the company handled 102 mmt of commodities in 2022,” Neeley reported. “Combined, the two companies have 125 crushing and refining facilities globally along with 55 port terminals and more than 350 grain storage facilities. The combined company would market more than 230 mmt of commodities and products.”

Glencore Announces Share Buy Back

Reuters’ Karl Plume reported that “the deal culminates a dramatic turnaround for Missouri-based Bunge. Just seven years ago, the two-century-old company struggled through a particularly weak stretch of earnings results that left it vulnerable to takeover attempts by rivals Glencore and ADM.”

“Investor pressure forced out Bunge’s CEO Soren Schroder in late 2018, before Greg Heckman was appointed to lead the company in April 2019,” Plume reported. “…Heckman will remain CEO of the combined company, and Bunge Chief Financial Officer John Neppl will also keep his role, Bunge said on Wednesday. Viterra CEO David Mattiske and Julio Garros, Bunge’s co-president of agribusiness, will be co-chief operating officers.”

Reuters also reported that “Glencore said on Wednesday it will buy back shares worth $1 billion starting next week following the merger of global agribusiness Bunge Global with its grain handler Viterra. The miner, which will hold 16.4% of the enlarged company and $900 million in cash, considers NYSE-listed Bunge shares as surplus capital.”

Bunge Completes $8 Billion Merger with Grain Trader Viterra was originally published by Farmdoc.