Exclusive-Bunge finalizing $30 billion-plus merger with Viterra -sources

© Reuters. Bunge Ltd logo is seen displayed in this illustration taken, April 10, 2023. REUTERS/Dado Ruvic/Illustration

By Abigail Summerville and Anirban Sen

NEW YORK (Reuters) - U.S. grains merchant Bunge (NYSE:BG) Ltd is putting the final touches on a deal to merge with Glencore (OTC:GLNCY) Plc-backed peer Viterra and create an agricultural trading giant worth more than $30 billion, including debt, people familiar with the matter said on Thursday.

The deal, whose terms have not been previously reported, would come as Russia's war in Ukraine has tested the security of supply in global food markets. Its potential impact would be examined closely by antitrust regulators.

Bunge, whose market value is about $14 billion and carries debt net of cash of about $2.7 billion, will pay for most of the deal with stock but will also use cash and has lined up debt financing from banks, the sources said. Bunge's management team, led by Chief Executive Greg Heckman, would oversee the combined company, the sources added.

Privately held Viterra's shareholders, which beyond Glencore include the Canada Pension Plan Investment Board and British Columbia Investment Management Corp, may sign off on the deal as early as this weekend if the negotiations conclude successfully, the sources said.

While the deal is on track to be announced next week, there is always a possibility it may collapse at the last minute, the sources cautioned, requesting anonymity because the matter is confidential. The deal's final value may vary based on the movement of Bunge's shares by the time the agreement gets signed, according to the sources.

Glencore and Viterra declined to comment. Bunge did not immediately respond to requests for comment.

Bloomberg News had reported on May 25 that Bunge and Viterra were in talks to combine, without providing details on the deal's terms and timing.

Trade in staples such as wheat, corn and soybeans is already concentrated among Bunge and three other large players - Archer-Daniels-Midland Co, Cargill Inc and Louis Dreyfus Co. Collectively referred to as "ABCD," they have been raking in hefty profits after the war in Ukraine disrupted shipments and sent crop prices skyrocketing.

Last year, Bunge was ranked as the largest corn and soy exporter from Brazil, which is the world's top source of the staple crops for making animal feed and biofuels, according to data from shipping agent Cargonave. Viterra was the third largest corn exporter and No. 7 soybean shipper.

Acquiring Viterra would bring Bunge revenue's revenues -- $67.2 billion in 2022 -- in line with Archer-Daniels-Midland, which registered sales of nearly $102 billion last year. The deal would also buoy Bunge's grain exporting and oilseed processing businesses.

This is not the first attempt at this deal. In early 2017, Viterra, then known as Glencore Agriculture, attempted a takeover of Bunge, which was then valued at $11 billion. In May 2017, Bunge rebuffed Glencore after the latter made an informal approach to discuss "a possible consensual business combination."

Viterra expanded its business of buying and selling grain in the United States through its $1.1 billion acquisition of Gavilon last year.