(Bloomberg) -- Bunge Global SA’s $8 billion deal to acquire Glencore Plc-backed Viterra is facing the risk of delays as countries including Canada, China and the European Union are yet to approve the acquisition.
The transaction is unlikely to get done by Bunge’s mid-2024 target, according to people familiar with the matter. The St. Louis-based trader had set a goal to finalize the deal before the end of August, said the people, who asked not to be named because the information is private.
Bunge is ‘B’ in the ABCD storied quartet of agricultural commodity traders that have dominated crop markets for more than a century. The deal to acquire Viterra would create a $25 billion behemoth capable of competing with the industry’s elite: Cargill Inc. and Archer-Daniels-Midland Co., the ‘A’ and the ‘C.’ Louis Dreyfus Co. represents the ‘D.’
Delays are being caused by antitrust concerns in various countries, and the deal is now more likely to be concluded before the end of the year, one of the people said. Still, Bunge is publicly sticking to its target, having told employees in recent months that the acquisition is still on track to be completed by the set deadline, according to the people.
Shares of Bunge fell as much as 1.8% in New York after the news, reversing earlier gains.
Bunge declined to comment.
In June, Andrew Strelzik, a BMO Capital Markets analyst, said he believed the deal appeared to be on track and that Bunge remained “comfortable with progress toward closing to-date.” The note followed meetings with Ruth Ann Wisener and Mark Haden, both from Bunge’s investor relations team.
Canada, EU
Canada’s antitrust watchdog raised concerns about the deal, saying it will have “substantial anti-competitive effects” on agricultural markets.
The EU has early-stage concerns that the planned tie up could throw up antitrust issues in certain central European grain markets, according to people familiar with the matter. The bloc has an initial deadline of midnight Thursday, Brussels time, for Bunge to submit remedies — a move which could add a further 10 days to the EU’s review. After this, regulators could still decide to escalate their probe further if their concerns haven’t been addressed.
China has yet to issue an opinion. While there’s no concern about business overlap there, the Asian nation is the world’s largest commodities buyer and top importer of soybeans. When Glencore acquired Xtrata, it ended up selling a copper mine in Peru to satisfy Chinese demands. Something similar could possibly happen with Bunge’s deal, the people said.
In an opinion piece on a Canadian trade publication, Bunge Chief Executive Officer Greg Heckman sought to allay concerns, saying the deal would be good for Canada and would not result in the closure of any facilities in the country. He also stressed that he disagreed with findings of a March 27 report that flagged concerns about Bunge’s stake in G3, a joint venture between the US crop giant and the Saudi Agricultural & Livestock Investment Co.
“The truth is, G3 and Viterra are competitors today and G3 will be a strong competitor to a combined Bunge-Viterra after the merger,” he wrote.
(Updates with share move in fifth paragraph)
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