Reuters — Global grain trader Viterra is in talks to merge with U.S. rival Bunge Ltd., according to a person familiar with the matter, in a potential mega-deal that would reshape the top tier of global grains merchants.
There is no certainty that Viterra, part-owned by Switzerland-based mining and trading giant Glencore, will be able to reach an agreement on the terms of a deal, the source said, requesting anonymity as these discussions are confidential.
The structure of the deal is still yet to be finalized and is being discussed by both parties, sources said.
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Shares of Bunge were trading at $93.76 apiece on Thursday, valuing the company at about $14 billion (all figures US$).
Global commodities merchants have built up cash reserves after turning in hefty profits over the past year as Russia’s invasion of Ukraine disrupted shipments and crop prices soaring.
Traders like Bunge and Viterra make money buying, selling, storing and processing crops, often capitalizing on supply disruptions caused by crises like drought or war.
A merger with Bunge would put Viterra among the top tier of global grains merchants, which include giants like Cargill and ADM, with access to export terminals in the U.S., one of the largest grain producers and suppliers.
Viterra bought U.S.-based Gavilon from Japan’s Marubeni last year for $1.1 billion, giving giving it significantly more physical grain handling assets in the U.S. and making it the third-largest exporter of soybeans in Brazil, where Bunge already has a strong presence. Gavilon rebranded to the Viterra name in February this year.
Viterra, formerly known as Glencore Agriculture, made headlines in 2017 for a failed takeover approach to Bunge, one of the giant names of global grain trading, then valued at $11 billion.
In May 2017, Bunge rebuffed Glencore after the latter made an informal approach to discuss “a possible consensual business combination.”
Bunge’s Canadian businesses today include oilseed crushing and processing and a joint stake in Prairie grain handler G3 Canada.
The Viterra brand dates back to 2007, when Canadian grain firms Saskatchewan Wheat Pool and Agricore United merged under the new name, followed by a takeover of Australia’s ABB Grain in 2009.
Viterra’s owners other than Glencore today include Canadian pension funds B.C. Investment Management Corp. and CPP Investments, which together hold 50 per cent.
Glencore has publicly said it was reviewing options for its interest in Viterra, looking to unlock more value.
Glencore, Viterra, and Bunge declined to comment. Bloomberg first reported on the talks between Viterra and Bunge.
— Reporting for Reuters by Anirban Sen; additional reporting by Deep Vakil in Bangalore, Gus Trompiz in Paris, Clara Denina in London and Karl Plume in Chicago.
