Bunge to merge with Viterra to form global super-agribusiness

Bunge Ltd. announced June 13 that it has entered into an agreement to merge with Viterra in a stock and cash transaction.

Viterra employs more than 17,500 employees in 37 countries and operates a strategic network of agricultural storage, processing and transport assets.

“The merger of Bunge and Viterra will create an innovative global agribusiness company well-positioned to meet the demands of increasingly complex markets and better serve farmers and end-customers,” Bunge stated. “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. 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 merger agreement was unanimously approved by both companies’ boards of directors.

Under the terms of the agreement, Viterra shareholders would receive approximately 65.6 million shares of Bunge stock, with an aggregate value of approximately $6.2 billion, and approximately $2 billion in cash, representing a consideration mix of approximately 75 percent Bunge stock and 25 percent cash.

As part of the transaction, Bunge will assume $9.8 billion of Viterra debt, which is associated with approximately $9 billion of highly liquid readily marketable inventories.

In addition, Bunge plans to repurchase $2 billion of Bunge’s stock.

“Bunge intends to commence repurchases as soon as practically possible, subject to market conditions and [U.S. Securities and Exchange] rules on trading restrictions and expects to complete the repurchase plan no later than 18 months post transaction close,” Bunge stated.

Viterra shareholders would own 30 percent of the combined company on a fully diluted basis upon the close of the transaction, and approximately 33 percent after completion of the repurchase plan, according to Bunge.

“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,” said Bunge CEO Greg Heckman. “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. ... 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 added, “Viterra and Bunge are two leading agriculture businesses. 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. Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business. This further enables us to offer innovative solutions and open additional pathways for our customers. We will create value for stakeholders across our network, as we build on our shared purpose to connect producers and consumers around the world. We look forward to joining with the Bunge team as we enter this next chapter, creating new opportunities for our people. The combined talent and experience of our workforce will allow us to offer a truly world-leading service across everything we do.”

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, Bunge stated, adding that the combined company will be diversified across the key export origins, as well as major crush destinations.

Furthermore, increased direct-origination reach will transform the combined company’s ability to promote sustainable practices in global food supply, including origination transparency, low-carbon product streams, full end-to-end traceability across major crops and origins, and the acceleration of regenerative agriculture to reduce greenhouse-gas emissions, according to Bunge.

Following the close of the transaction, the combined company will be led by CEO Heckman and John Neppl, Bunge’s chief financial officer.

Viterra CEO Mattiske will join Bunge’s executive-leadership team in the role of co-chief operating officer.

The combined company will operate as Bunge with operational headquarters in St. Louis, Missouri.

Viterra’s current headquarters in Rotterdam, the Netherlands, will be an important commercial location in the future of the combined company.

The Bunge board of directors is expected to be comprised of eight Bunge-nominated representatives and four representatives nominated by Viterra shareholders after the completion of the transaction.

Glencore and CPP Investments will each enter into a shareholder agreement with Bunge at the closing of the transaction and each will initially be able to nominate two Bunge board members.

The merger is expected to close in mid-2024.