Bunge, Viterra to Merge to Create Global Agribusiness Giant

By Adriano Marchese

Bunge and privately held agriculture network company Viterra have agreed to merge in a cash-and-stock deal that would create a large diversified agribusiness with global reach.

The agricultural and food company said Tuesday that it has entered into a definitive agreement with Viterra, together with certain affiliates of Glencore, the Canada Pension Plan Investment Board, and British Columbia Investment Management to merge the two businesses.

Bunge said the addition of Viterra to its company would add highly complementary assets that would position it to connect the world's largest agricultural areas to meet growing demand.

"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 benefiting farmers and end customers," Bunge Chief Executive Greg Heckman said.

Operationally, the merger is expected to generate about $250 million of pretax synergies per year within the first three years of completing the deal as well as introduce more stable cash flows from the larger, more diversified footprint.

Under the terms of the agreement, Viterra shareholders would receive about 65.6 million shares of Bunge stock with a value of $6.2 billion, as well as $2 billion in cash.

Bunge will also assume $9.8 billion of Viterra debt.

The company said that it also plans to repurchase about $2 billion of its own stock in a repurchase plan to enhance accretion to its adjusted earnings in the first full year post-closing and continue to improve with the realization of synergies.

After the transaction closes, Viterra shareholders are expected to own about 30% of the newly combined entity, which would later expand to about 33% following the end of the share repurchases.

The merger is expected to close in the middle of next year.

Write to Adriano Marchese at adriano.marchese@wsj.com

Corrections & Amplifications

This article was corrected at 07:17 a.m. ET to clarify that under the terms of the agreement, Viterra shareholders would receive about 65.6 million shares of Bunge stock with a value of $6.2 billion, as well as $2 billion in cash. An earlier article incorrectly used a dollar sign in front of the number of shares that Viterra shareholders would receive.

(END) Dow Jones Newswires

June 13, 2023 07:03 ET (11:03 GMT)

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