Source: Sharecast
The two companies said the deal would create an "innovative global agribusiness well positioned to meet the demands of increasingly complex markets".
Under the terms of the agreement shareholders in Viterra - which is backed by commodity giant Glencore - will receive around 65.5m shares in Bunge, with an aggregate value of $6.2bn, and around $2bn in cash. New York-listed Bunge, which is the world’s biggest oilseed processor, will also assume $9.8bn of Viterra’s debt as well as repurchasing $2bn of its stock, "to enhance accretion to adjusted earnings per share".
The combined company is expected to be valued at around $34bn.
Chief executive Greg Heckman, who will take on the same role at the merged company, said the deal "significantly" accelerated Bunge’s strategy.
He continued: "With a diversified global mix of earnings across processing, handling and merchandising, and value-added products, we will increase the resilience 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."
David Mattiske, chief executive of Viterra, said: "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."
Rotterdam-based Viterra has significant grain handling and marketing operations in western Canada and south Australia. As well as Glencore, its other shareholders include Canada Pension Plan Investment Board and British Columbia Investment Management.
As at 1330 BST, Bunge's shares were down 2% in pre-market trading.
