Bunge finalizes merger deal with Glencore-backed Viterra

US agribusiness Bunge has finalized a merger with private Canadian company Viterra to create a major diversified global agribusiness solutions company, the company said in an official statement Tuesday.

Under the terms of the agreement, shareholders of Viterra, which is affiliated with Glencore, will receive around 65.6 million in Bunge stock with an approximate value of $6.2 billion, as well as roughly $2.0 billion in cash, representing a consideration mix of about 75% Bunge stock and 25% cash, according to the statement.

It also said that St. Louis, Missouri, headquartered Bunge would assume $9.8 billion of Viterra’s debt as the part of transaction.

The first attempts by the two companies to merge were reported back in 2017.

The merger will create a global business rivaling that of Cargill Inc. and Archer-Daniels-Midland Co (ADM), fellow members of the so-called ABCD big four agriculture companies along with Louis Dreyfus company.

Bunge said it planned to buy back $2.0 billion of Bunge’s stock (the “Repurchase Plan”) to enhance accretion to adjusted earnings per share and expects to complete the plan in no later than 18 months post-transaction close.

Meanwhile, it is expected that Viterra shareholders would own 30% of the combined company on a fully diluted basis upon the close of the transaction, and approximately 33% after completion of the Repurchase Plan.

Among the key goals of the merger, according to Bunge, is to create an enhanced global network able to meet the complex needs of the market and better serve farmers and end-customers, increased diversification of assets, crops, geographics, supply chain, and strategical position and accelerating investments into sustainable solutions into the main food challenges in the 21st century.

Additionally, it will create a compelling financial profile with a strong investment-grade balance sheet that supports shareholder returns.

Viterra is majority owned by Switzerland-based Glencore and Canada's CPP Investments and British Columbia Investment Management Corporation.