U.S. company Bunge Ltd. has signed a deal to merge with Viterra Ltd., which is owned by Glencore, the Canada Pension Plan Investment Board and B.C. Investment Management Corp.
The companies said Tuesday the deal create a global agribusiness company well positioned to meet the demands of complex markets and better serve farmers and customers.
“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,” Bunge chief executive Greg Heckman said in a statement.
“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.”
Under the terms of the agreement, Viterra’s shareholders will receive 65.6 million Bunge shares, valued at a total of about US$6.2 billion, and about US$2.0 billion in cash. Bunge will also assume US$9.8 billion of Viterra debt.
Viterra shareholders will own 30 per cent of the combined company on a fully diluted basis when the deal closes and about 33 per cent after completion of a planned US$2-billion share repurchase plan by Bunge.
The merger is expected to close in the middle of 2024, subject to customary closing conditions, including regulatory approvals and approval by Bunge shareholders.
The combined company will be led by Heckman and Bunge chief financial officer John Neppl, while Viterra chief executive David Mattiske will become co-chief operating officer.
The board of the combined company is expected to include eight Bunge nominated directors and four nominated by Viterra shareholders after the deal is completed.
Glencore bought Viterra and its substantial Canadian operations in 2012. It later sold a 40 per cent stake in the company to CPP Investments and a nearly 10 per cent stake to B.C. Investment Management in 2016.
CPP Investments said Tuesday it expects to receive about a 12 per cent stake in the combined company and US$800 million in cash in exchange for its interest in Viterra.