Bunge and Viterra are already in the process of merging.
Bunge is a US grain trader, and Viterra is a Canadian one. They are currently working to merge into a single agricultural company.
In this case, its value could reach $34 billion, analysts believe.
Moreover, such a merger could lead to strengthening of leadership, since it will be possible to compete with the leading market players: ADM and Cargill.
At the same time, there are risks that the combined company may face additional oversight from regulatory authorities, including in terms of antitrust laws.
This is especially likely in Canada and Argentina, but is possible in many other countries, experts warn.
“The companies are very complementary. The way the assets and teams fit together is a strategic advantage that we have been looking at for years…
Everything has finally aligned,” notes the CEO of the new company Greg Heckman.
Even before the merger, the companies showed impressive volumes.
For example, Bunge was the largest exporter of soybeans from Brazil in 2022. This product was the world’s main source of raw materials for animal feed, as well as biofuels.
Bunge is also the world’s largest processor of oilseeds
As for Viterra, it was the third player in the world in terms of corn exports, and the seventh in soybean shipments.
Obviously, the companies are really very close in their profiles and volumes, so their merger was quite possible.
It is assumed that both companies will benefit from the merger.
For example, Bunge will receive additional grain storage and handling capacity in Australia.
It currently has 2 elevators and a port terminal on this continent, the new facilities will help strengthen its presence and increase supply volumes. After all, Viterra has as many as 55 warehouses in Australia, as well as 6 terminals for grain exports.
At the same time, the merger can clearly increase financial indicators. Analysts believe that after the merger, the company can expect an annual profit of about $4 billion.
It is planned that about 70% of the shares of the new company will belong to Bunge shareholders. Viterra shareholders will receive another 30% of the shares.
At the same time, Viterra officially announced its withdrawal from the Russian market in 2023. How the merged company will act in this regard will become known soon.
