U.S. agribusiness Bunge (BG) is buying Viterra, Canada’s largest grain handling business, for $8.2 billion U.S. in stock and cash.
Bunge is purchasing Viterra from its parent company Glencore (GLEN), a Swiss-based commodity trading and mining firm.
Viterra shareholders will eventually own about 30% of the combined business after the deal is completed.
About 75% of the purchase price will be financed with Bunge stock, and the other 25%, or $2 billion U.S., will be financed with cash.
The deal has been approved by the boards of both Bunge and Viterra.
Bunge will assume $9.8 billion U.S. of Viterra’s debt and plans to repurchase $2 billion U.S. of its own stock.
Once finalized, the deal will enable Bunge to better compete with the world’s biggest agriculture businesses such as Cargill and Archer-Daniels-Midland (ADM).
Glencore’s stock rose 4% on news of the Viterra sale. Bunge’s stock declined 3%.