(Toronto) The American company Bunge has signed a merger agreement with Viterra, which is owned by Glencore, the Canada Pension Plan Investment Board (CPPIB) and B. C. Investment Management Corporation.
The companies announced on Tuesday that the deal would create a global agribusiness 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 core purpose of connecting farmers with consumers to provide essential food, feed and fuel to the world,” said in a statement. Bunge CEO Greg Heckman said.
“Our highly complementary asset footprints will create a network that connects the world’s largest producing regions to the fastest growing consumer areas, improving the geographic balance and adaptability of our global value chains and benefiting farmers and consumers. »
Under the terms of the agreement, Viterra shareholders will receive 65.6 million shares of Bunge stock, valued at a total of approximately US$6.2 billion, and approximately US$2.0 billion in cash. Bunge will also assume Viterra’s US$9.8 billion debt.
Viterra shareholders will own 30% of the combined company on a fully diluted basis upon closing, and approximately 33% after the completion of a planned US$2 billion share repurchase plan by Bunge.
The merger is expected to be completed in mid-2024, subject to customary closing conditions, including regulatory and Bunge shareholder approvals.
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 new entity’s board of directors is expected to include eight directors appointed by Bunge and four appointed by Viterra shareholders after the transaction closes.
Glencore bought Viterra and its large Canadian operations in 2012. It then sold a 40% stake in the company to CPPIB and a nearly 10% stake to B.C. Investment Management Corporation in 2016.
CPP Investment said on Tuesday it expects to receive about a 12% stake in the combined company and US$800 million in cash in exchange for its stake in Viterra.