Glencore May Make Takeover Approach to Grain Trader Bunge

Prominent agribusiness firm Bunge Ltd. recently engaged in discussions with Glencore Plc's agricultural unit about the prospect of forming a partnership in North America, Reuters reported Tuesday, citing information from unnamed sources.

Earlier on Tuesday, Glencore said its agricultural unit had made an informal approach to Bunge about a "possible consensual business combination".

Glencore, which made the approach through its Glencore Agriculture business, said talks may or may not materialise, and said there was "no certainty" a deal would go ahead.

Glencore offloaded a 49 per cent stake in its agriculture business previous year to two Canadian pension funds for more than $3bn.

Shares in Bunge jumped almost $10 on the New York Stock Exchange during Tuesday's session, when news of Glencore's approach was revealed.

Jefferies said it was unclear how a potential deal between Glencore and Bunge would be funded, though noted it "would not be surprised by a complex deal structure that leads to better economics and less risk for Glencore than the market might initially perceive".

Earlier this month, Bunge CEO Soren Schroder told analysts the grain trader is open to large-scale tie-ups in the sector.

Based in Switzerland, Glencore has a market capitalization of more than $55 billion and controls roughly 150 mining, metals, oil and agricultural assets in 50 countries. Shares jumped as much as 17.6 percent to a 2-1/2-month high, and were up 16 percent, the biggest share gain in more than eight years, at $81.28 at midafternoon.

  • Zachary Reyes