Bunge, Viterra to Merge to Create Global Agribusiness Giant
June 13 2023 - 6:18AM
Dow Jones News
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
(END) Dow Jones Newswires
June 13, 2023 07:03 ET (11:03 GMT)
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