ADVERTISEMENT

Commodities

Bunge’s $8.2 Billion Viterra Deal Wins Conditional EU Nod

A sign on a Viterra grain elevator in Saskatoon, Saskatchewan, Canada, on Monday, June 12, 2023. US agribusiness Bunge Ltd. is near a deal to acquire Glencore Plc-backed Viterra, people familiar with the matter said, creating a giant capable of competing with the world's biggest agricultural players. Photographer: Heywood Yu/Bloomberg (Heywood Yu/Bloomberg)

(Bloomberg) -- Bunge Global SA’s planned $8.2 billion buyout of Viterra Inc. won European Union approval after concessions offered by the firms allayed competition concerns.

The tie-up, announced in June last year, will see Bunge buy Glencore Plc-backed Viterra in stock and cash, with the US crop trader owning about 70% of the combined entity. It would become the world’s second-biggest agricultural trading company by revenue, dominating the soybean and wheat markets.

“We had concerns that the transaction could affect the supply chains of rapeseed and sunflower seed in Central Europe, with potential ramifications across the food, feed, and biofuel industries,” Margrethe Vestager, the EU’s antitrust commissioner, said in an emailed statement. 

“The divestiture of Viterra’s entire oilseeds business in Hungary and Poland will preserve competition in these markets,” she said.

That’s a much-needed victory for Bunge. The St. Louis-based trader said on Wednesday that the conclusion of the deal might still take “several months,” meaning a delay to its initial mid-year target. The company is also faced with plunging profits as it weathers a downturn in grain markets. 

Bunge is “B” in the ABCD quartet of agricultural commodity traders that have dominated crop markets for over a century. The deal to acquire Viterra would create a $25 billion giant 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.”

Bunge is “pleased with the European Commission’s decision for conditional clearance” of the transaction, a spokesperson said by email, adding the combination with Viterra is poised to “increase market access and opportunities for farmers and end-customers.”

The deal has faced mixed reactions from global regulators. In April, Canada’s antitrust watchdog said the deal would cause substantial harm to competition because of Bunge’s ownership stake in a competing network of western Canadian grain elevators. 

More recently, Brazil approved the deal, while the Australian watchdog said in December that the acquisition isn’t likely to harm competition in the country.  

--With assistance from Samuel Stolton and Gerson Freitas Jr..

(Updates with company comment in seventh paragraph.)

©2024 Bloomberg L.P.