Glencore’s Viterra to acquire Gavilon for $1.1bn

Glencore-owned Viterra Limited has entered into a stock purchase agreement to acquire the grain and ingredients business of Gavilon Agriculture Investment, for $1.1 billion. 

Gavilon, based in Omaha, Nebraska, stores and distributes grains, oilseeds, feed and food ingredients to customers worldwide. It has an asset network that spans the US, as well as international operations in Mexico, South America, Europe and Asia. 

“The addition of Gavilon supports our long-term strategy of significantly increasing our presence in the United States, one of the major producing and exporting regions, which will further strengthen our global network,” said David Mattiske, CEO of Viterra. “The combination of the Gavilon and Viterra origination businesses will enable us to provide more value and flexibility to our customers. We will be able to rapidly enhance our sustainable supply chains, provide higher levels of quality control and reliability, while creating exciting opportunities for our customers and employees.”

He continued: “We look forward to welcoming the employees of Gavilon to the Viterra team, and further strengthening the successful business and commercial relationships Gavilon has built with producers and consumers”.

Peter Mouthaan, CFO of Viterra, added: “This transaction demonstrates the continued support of our shareholders to execute on opportunities that deliver significant growth for our business, while maintaining a robust balance sheet. Funding for the agreed purchase price and a portion of the assumed working capital has been secured through the signing of a committed acquisition financing facility. Funding for the remainder of the working capital will be financed by using proceeds from other committed financing facilities and cash on hand, including existing available undrawn committed credit lines amounting to approximately US $3.6 billion as of 31 December 2021.”

Glencore acquired Vittera for $6.1bn almost ten years ago, aiming to accelerate its agricultural trading division. 

The transaction is subject to customary closing and regulatory conditions. It is expected to close in the second half of 2022.