USA/Netherlands: The B of the ABCDs gets bigger

The global crop merchant BungeLimited has announced its acquisition of competitor a deal valued at USD 8.2 billion, comprising both cash and shares. The transaction will create an agricultural powerhouse, well positioned to meet the demands of increasingly complex markets and better serve farmers and end-customers.

Viterra, a subsidiary of Anglo-Swiss multinational commodity trading and mining company Glencore, has been involved in the malting business being the former owner of Australian company Joe White Maltings. In 2013, Viterra sold the business to Cargill, which in turn sold its whole malting division in 2019 to Boortmalt. (, 4.11.2019)

Viterra's predecessors were the grain-trading co-operatives set up in Canada during the 1920s known as the wheat pools. In 2007, Viterra Inc. was formed as a publicly traded corporation when the Saskatchewan Wheat Pool acquired Agricore United, which was at that time the largest grain handler in Western Canada. In the following years, Viterra Inc grew into a global agri-business with operations in Canada, the United States, Australia, New Zealand and China. Following its USD 6.1-billion acquisition by Glencore International, on 1 January 2013, Viterra is headquartered in Rotterdam, the Netherlands.

Bunge Limited is an American agribusiness and food company, incorporated in Bermuda and headquartered in St. Louis, Missouri, United States. As well as being an international soybean exporter, it is also involved in food processing, grain trading, and fertilizer. Bunge is part of the Big 4 of world agriculture – also called ABCDs – namely Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus.

While today, Bunge and Viterra are both major players in the agricultural industry, they primarily focus on the trading, processing, and distribution of various commodities, including grains, oilseeds, and pulses. While they indirectly interact with malting barley as part of their grain trading activities, their core businesses revolve around the broader agricultural supply chain rather than specific segments like malting.

The combined entity will have an extensive network of storage and processing facilities, as well as a substantial fleet of ships, strengthening its position in major agricultural regions worldwide. The consolidated revenues of Bunge-Viterra in 2022 totaled USD 121 billion, placing the merged group near Cargill, the largest agricultural commodities company globally with revenues of USD 165bn in its fiscal year ended May 2022.

“With an enhanced global network, the combined company’s increased diversification across geographies, seasonal cycles and crops will increase optionality in managing risk and increase resiliency,” the company said in a statement.

“Together, the highly complementary organizations will benefit from more diversified capabilities, greater operational flexibility across oilseed and grain supply chains and processing, greater resources and combined employee talent to innovate and deliver for customers in every environment, creating value for all stakeholders.”

The consolidation will enhance Bunge's presence in key food-supplying regions like Canada and the US, bringing it into direct competition with other industry giants like Cargill and Archer Daniels Midland.

Shareholders of Viterra, including Glencore, will receive approximately USD 6.2 billion in Bunge shares and USD 2 billion in cash, granting them a one-third stake in the combined company.

The merger comes after a profitable year for both Bunge and Viterra, fueled by market volatility caused by the Ukraine conflict. The deal will diversify Bunge's operations and provide insulation against external factors such as climate change-induced regional droughts.

The completion of the transaction, expected in mid-2024, is subject to antitrust reviews, and any potential asset disposals required by regulators.

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