Commodities trader Bunge is one step closer to the acquisition of Dutch-based competitor Viterra, announced mid-last year. Bunge has settled an ongoing case in another subsidiary and is now awaiting approval of the acquisition by US stock exchanges. The acquisition is expected to create a new agricultural giant with an estimated value of $25 billion.
Bunge, one of the four largest players in global agricultural trading, is known as the “B” in the ABCD quartet of dominant commodity traders, alongside Archer-Daniels-Midland (ADM), Cargill and Louis Dreyfus. These four companies have a firm grip on the global agricultural market.
Viterra, which last year reported a profit of $141 million, saw its revenue halve to $70 million in the first half of 2024. Despite this, the company is attractive due to its global network and activities in grain and oilseed trading, storage and processing. The acquisition will increase Bunge’s global presence, particularly in markets where it is still underrepresented.
The financial benefits of the acquisition are also successful. Bunge expects to achieve approximately $250 million in annual synergy benefits. In addition, the company ensures stable cash flows through the greater diversity in its activities, which helps to better absorb the volatility in the agricultural markets.
The completion of the deal is subject to regulatory approvals in several markets, but is widely seen as an important strategic step for both companies. Once the deal is completed, Viterra shareholders will own approximately 30% of the new entity.
The acquisition comes at a time when the global agricultural sector is facing increasing challenges in the areas of food security and environmental sustainability. This consolidation is seen as a step to better respond to these challenges and to further strengthen the position of both companies in international trade.