Might 25 (Reuters) – World grain dealer Viterra is in talks to merge with U.S. rival Bunge Ltd (BG.N), an individual acquainted with the matter mentioned, in a possible mega deal that may reshape the highest tier of worldwide grains retailers.
There isn’t any certainty that Viterra, part-owned by Switzerland-based mining and buying and selling big Glencore (GLEN.L), will be capable to attain an settlement on the phrases, the supply mentioned, requesting anonymity as these discussions are confidential.
The deal construction is being mentioned by each events, sources mentioned.
Any deal can be carefully scrutinized by regulators as commerce in staples equivalent to wheat, corn and soybeans is already concentrated amongst Bunge and three different massive gamers, elevating world considerations about meals safety.
Bunge final 12 months was the most important corn and soy exporter from Brazil, the world’s high supply of the staple crops for making animal feed and biofuels, in keeping with information from transport agent Cargonave. Viterra was the third largest corn exporter and No. 7 soybean shipper.
A merger with Viterra would additionally raise Bunge, with 2022 revenues of $67.2 billion, nearer to its nearest publicly traded agribusiness rival Archer-Daniels-Midland Co, which registered gross sales of practically $102 billion final 12 months.
Shares of Bunge closed at a three-week excessive of $93.61 on Thursday, valuing the corporate at about $14 billion. Glencore shares fell 0.7%.
World commodities retailers have constructed up money reserves after handing over hefty income over the previous 12 months as Russia’s invasion of Ukraine disrupted shipments and crop costs hovering.
The agribusinesses make cash shopping for, promoting, storing and processing crops, usually capitalizing on provide disruptions attributable to crises like drought or battle.
A merger with Bunge would put Viterra among the many high tier of worldwide grains retailers, with entry to export terminals in america, one in all largest grain producers and suppliers.
Viterra purchased U.S.-based Gavilon from Japan’s Marubeni final 12 months for $1.1 billion, giving it considerably extra bodily grain dealing with belongings within the U.S. and making it the third-largest exporter of soybeans in Brazil, the place Bunge already has a robust presence.
Viterra, previously often known as Glencore Agriculture, made the headlines in 2017 for a failed takeover strategy to Bunge, one of many big names of worldwide grain buying and selling, then valued at $11 billion.
In Might 2017, Bunge rebuffed Glencore after the latter made a casual strategy to debate “a doable consensual enterprise mixture.”
Glencore had publicly mentioned it was reviewing choices for its curiosity in Viterra, seeking to unlock extra worth.
Glencore, Viterra and Bunge declined to remark. Bloomberg first reported on the talks between Viterra and Bunge.
Extra reporting by Deep Vakil in Bengaluru, Gus Trompiz in Paris, Clara Denina in London and Ana Mano in Sao Paulo; Modifying by Marguerita Choy and Richard Chang
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