Bunge is a force in global oilseed crushing, and some of its global leaders are pictured on a site visit last year to the company’s crushing and refining facility in Rondonópolis, Brazil. Photo: Daniel Teixeira Costa
FOLLOWING months of speculation, Bunge overnight announced it has entered into an agreement to buy Viterra.
Bunge is listed on the New York Stock Exchange, while Viterra is a private company owned by Glencore PLC, Canada Pension Plan Investment Board and British Columbia Investment Management Corporation.
“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 officer Greg Heckman said.
“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 benefitting farmers and end-customers.
“With a diversified global mix of earnings across processing, handling and merchandising, and value-added products, we will increase the resiliency of our cash-flow generation.”
Bunge was founded in Amsterdam in 1818, and is the world’s largest oilseed crusher, with a mighty presence in the world’s three biggest soybean-producing countries: Argentina, Brazil, and the US.
It is also a major crusher of canola/rapeseed, and sunflower seed.
Bunge employs around 23,000 people working at roughly 300 facilities located in more than 40 countries, while Viterra employs around 17,500 staff operating in 37 countries.
Approximately 36pc of Bunge’s processing capacity is located in South America, 26pc in North America, 23pc in Europe and 15pc in Asia-Pacific.
The combined company will operate as Bunge, with operational headquarters staying put in St. Louis, Missouri.
The merger is expected to close in mid-2024.
Viterra’s current headquarters in Rotterdam will be “an important commercial location in the future of the combined company”.
South Australian assets significant
In Australia, Bunge has a shipping terminal at Bunbury and grain receival sites at Arthur River and Kukerin, all in southern Western Australia.
Bunge is also a joint-venture partner in the Australian Plant Proteins pulse-processing facility at Horsham in Victoria.
Viterra owns and operates South Australia’s major bulk-handling network, which includes six port terminals that in March achieved their biggest ever month of shipping by loading close to 1 million tonnes of grain.
In addition to its many up-country sites in SA’s grainbelt, it also has two in far western Victoria.
Viterra Australia has been contacted for comment.
Carbon-neutral goal
Viterra has grown from a Canadian grain-handling business into a global trading entity with origins going back to the 1980s with Marc Rich, and is active throughout the supply chain, with assets in Europe, North and South America involved with grain, oilseeds and sugar.
“We have great respect for the team at Viterra, which shares our commitment to excellence, and believe this combination will offer great opportunities for employees of both companies,” Mr Heckman said.
“Together, we will be positioned to increase our operational efficiency while innovating to address the pressing needs of food security, efficiency for end-customers, market access for farmers, and sustainable food, feed and renewable fuel production.”
Viterra CEO David Mattiske said the merger will create a company which plays a leading role in the future of the agriculture industry by developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations.
“In combining our highly complementary origination, processing and distribution networks, we are better positioned to meet the increasing demand for the food, feed and fuel products we offer,” Mr Mattiske said.
In the statement issued overnight, Bunge said the combined company’s increased diversification across geographies, seasonal cycles and crops will increase optionality in managing risk and increasing resilience.
Benefits of the merger outlined include: 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.
Viterra to hold third
Under the terms of the agreement, Viterra shareholders are to receive approximately 65.6 million shares of Bunge stock, with an aggregate value of approximately US$6.2 billion, and approximately $2B in cash.
As part of the transaction, Bunge will assume $9.8B of Viterra debt, which is associated with approximately $9B of highly-liquid Readily Marketable Inventories.
Viterra shareholders will own around one third of Bunge when the transaction is complete.
The combined company will better connect the world’s largest production regions to areas with the fastest-growing consumption.
“The combination augments Bunge’s existing footprint with significant grain and softseed handling capacity, while expanding origination capabilities in key regions and crops where Bunge is underrepresented,” the statement said.
“The combined company will be diversified across the key export origins, as well as major crush destinations.
Following the close of the transaction, the combined company will be led by Mr Heckman and Bunge’s chief financial officer John Neppl, while Mr Mattiske will join the Bunge executive leadership team in the role of co-chief operating officer.
The Bunge Board of Directors is expected to comprise eight Bunge-nominated representatives and four representatives nominated by Viterra shareholders.
Source: Bunge