Bunge and Glencore-owned Viterra have now confirmed that they will merge businesses in an $8.2 billion deal, as reported by FoodBev at the end of May.
The merger of Bunge and Viterra will create a global agribusiness company that is able to meet the demands of “increasingly complex markets,” to better serve farmers and end-customers.
The definitive agreement includes certain affiliates of Glencore, Canada Pension Plan Investment Board and British Columbia Investment Management Corporation, to merge with Viterra in a stock and cash transaction.
As a result, the two merged organisations will benefit from more diversified capabilities, greater operational flexibility across oilseed and grain supply chains and processing, and increased resources.
Under the terms of the agreement, Viterra shareholders would receive approximately 65.6 million shares of Bunge stock, with an aggregate value of approximately $6.2 billion and approximately $2 billion in cash.
In addition, Bunge plans to repurchase $2 billion of Bunge’s stock to enhance accretion to adjusted earnings per share. Upon close of the transaction, Viterra shareholders own 30% of the combined company on a fully diluted basis and approximately 33% after completion of the repurchase plan.
Greg Heckman, Bunge’s CEO, said: “The combination of Bunge and Viterra significantly accelerates Bunge’s strategy, building on our fundamental purpose to connect farmers to consumers to deliver essential food, feed and fuel to the world. Our highly complementary asset footprints will create a network that connects the world’s largest production regions to areas of fastest growing consumption, enhancing the geographical balance and adaptability of our global value chains and benefitting farmers and end-customers.”
He added: “Together, we will be positioned to increase our operational efficiency while innovating to address the pressing needs of food security, efficiency for end-customers, market access for farmers, and sustainable food, feed and renewable fuel production.”
Following the close of the transaction, the combined company will be led by Heckman and Bunge’s CFO, John Neppl. Viterra’s CEO, David Mattiske, will join the Bunge executive leadership team in the role of co-chief operating officer.
The combined company will operate as Bunge with headquarters in St Louis, Missouri, US. Viterra’s current headquarters in Rotterdam, the Netherlands, will be an important commercial location for the combined company.
Mattiske said: “Viterra and Bunge are two leading agriculture businesses. In combining our highly complementary origination, processing and distribution networks, we are better positioned to meet the increasing demand for the food, feed and fuel products we offer”.
The merger is expected to close in mid-2024, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by Bunge shareholders.
BofA Securities is acting as financial advisor and Latham & Watkins is acting as legal counsel to Bunge.
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