Bunge And Viterra $30 Billion Merger Deal In Final Stages
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Bunge Ltd, a grains merchant in the United States, is in the last stages of finalizing a merger with Viterra. The deal between Bunge and Glencore-backed Viterra will support the creation of a trading giant in the agricultural space that is worth over $30 billion inclusive of debt.
Bunge nears closure of merger deal with Viterra
The terms of this partnership deal have not been shared previously. However, this deal comes at a time when the war between Russia and Ukraine has put pressure on the supply of global food markets. The potential effects of the deal will be assessed by antitrust regulators.
Bunge is a grains merchant with a market value of around $14 billion. The platform has a debt net of cash worth around $2.7 billion. The company will settle the majority of this deal using stock. The deal will also be settled with cash as the company is in the process of securing debt financing from banks.
The combined company created through this merger will be led by Chief Executive Greg Heckman. The deal could be signed off by Viterra shareholders this weekend if the negotiations end successfully.
The merger deal could be announced next week. However, there is a possibility that last-minute discussions might affect the timeline. The final value of the deal will vary depending on the value of Bunge shares by the time that this agreement deal is signed.
On May 25, a report by Bloomberg said that Bunge and Viterra were holding discussions about merging the two companies. However, at the time, there were no details about when the deal would be finalized or the terms of the same.
Bunge as a major player in the grains industry
Bunge and three other leading players in the grains industry deal in staples like corn, soybeans, and wheat. These companies have been making massive profits following the war in Ukraine that caused a disruption in the global supply chain and led to the prices of grains increasing significantly.
In 2022, Bunge emerged as the largest exporter of corn and soy from Brazil. At the time, Viterra ranked as the third-largest exporter of corn and the seventh-largest shipper of soybean.
The acquisition of Viterra by Bunge will bring the total revenues of the latter to $67.2 billion in 2022. The increase will see the company coming closer to reaching the levels that have been reported by Archer-Daniels-Midland, which hit nearly $102 billion worth of registered sales in 2022.
It is not the first time that the deal between the two companies has been proposed. In 2017, Viterra attempted to take over Bunge at an $11 billion valuation. However, in May of the same year, Bunge halted the deal after Glencore made an informal approach to discuss a possible consensual business merger.
Last year, Viterra closed a $1.1 billion acquisition deal for Gavilon. Through this deal, the company expanded its operations of buying and selling grain in the US.
