US agribusiness giant Bunge has signed a deal to merge
with Viterra, one of the leading grain handlers in North America. The merger
will enable the combined entity to play a leading role in the world grain
According to the terms of the agreement, Viterra's shareholders will receive 65.6 million Bunge shares valued at around $6.2 billion, along with a cash consideration of approximately $2.0 billion. Bunge will also undertake Viterra's debt of $9.8 billion. Following the completion of the merger, Viterra shareholders will own 30% of the combined company on a fully diluted basis, increasing to approximately 33% after Bunge completes its planned $2 billion share repurchase program.
The merger is expected to enhance the combined company's capabilities, increase operational flexibility, and generate value for all stakeholders. This merger positions Bunge in closer competition with Archer-Daniels-Midland and Cargill, two industry heavyweights. With the acquisition of Viterra, Bunge's annual revenue of $67.2 billion in 2022 will align more closely with ADM's $102 billion in sales last year. The merger is projected to yield approximately $250 million in annual gross pre-tax operational synergies within three years.
The newly formed entity will be led by Bunge's Chief Executive Officer, Greg Heckman, and Chief Financial Officer, John Neppl. Viterra's Chief Executive, David Mattiske, will assume the role of Co-Chief Operating Officer. The merged company will retain the name Bunge and have its headquarters based in St. Louis, while Viterra's Rotterdam headquarters in the Netherlands will serve as a key commercial location.
Greg Heckman, the Chief Executive Officer of Bunge, expressed his enthusiasm about the merger, highlighting the alignment of Bunge's and Viterra's strategies to connect farmers with consumers and deliver essential food, feed, and fuel worldwide. The combined company will have an expanded network that connects major production regions with areas of fast-growing consumption, enabling greater geographical balance and adaptability in global value chains. With diversified earnings across processing, handling, and merchandising, the company aims to enhance its cash flow generation and increase operational efficiency while addressing critical areas such as food security, market access for farmers, and sustainable food production.
Last year, Bunge held the distinction of being the largest exporter of corn and soybeans from Brazil, the primary source of these essential crops for animal feed and biofuels. Viterra ranked as the third-largest corn exporter and the seventh-largest soybean shipper. Together, the merged companies accounted for approximately 23.7% of Brazil's corn exports and 20.9% of soybean exports in 2022.
In the United States, Viterra significantly expanded its grain trading business through the acquisition of Gavilon last year. The merger with Viterra will bolster Bunge's grain export and oilseed processing activities in the second-largest corn and soy exporter globally, where it currently holds a smaller market presence compared to ADM and Cargill.
Moreover, the deal will expand Bunge's physical storage and handling capabilities for grains in Australia, a major wheat exporter. Presently, Bunge operates only two grain elevators and a port terminal in the western part of the country. In contrast, Viterra possesses 55 storage sites in South Australia and western Victoria, along with six bulk grain export terminals.
The merger is subject to customary closing conditions, including regulatory approvals and approval by Bunge shareholders. It is expected to be finalized in mid-2024.