USA – Bunge Global SA’s ambitious US$8.2 billion takeover of Viterra Inc. has received the European Union’s approval, marking a significant milestone in the agricultural sector.
The EU’s approval follows concessions from the companies to address concerns about competition in key markets.
Bunge and Viterra are both vertically integrated global agribusinesses, active in the origination, trading and processing of agricultural products, with significant overlaps in the sector of oilseeds (i.e., rapeseed, soybean and sunflower seed).
The merger, first announced in June 2023, still awaits regulatory approvals in North America, South America, and China. Once finalized, the merger is expected to significantly reshape the global agribusiness landscape, enhancing the combined entity’s influence and operational scale in the sector
Bunge will control about 70% of the combined entity, positioning it as the world’s second-largest agricultural trading company by revenue. This merger will enhance Bunge’s dominance in the soybean and wheat markets.
European Union antitrust commissioner Margrethe Vestager noted concerns about the potential impact on rapeseed and sunflower seed supply chains in Central Europe, which could affect the food, feed, and biofuel industries.
In response, the companies have agreed to divest Viterra’s entire oilseeds business in Hungary and Poland to maintain competitive market conditions.
“The divestiture will help preserve competition in these crucial markets,” Vestager stated.
Despite the EU’s green light, Bunge has acknowledged that the deal’s finalization may take several months, delaying its initial mid-year target for completion. The company is also grappling with reduced profits due to a downturn in grain markets.
The acquisition positions Bunge, part of the historic “ABCD” quartet of global agricultural traders, alongside Cargill Inc. and Archer-Daniels-Midland Co., while Louis Dreyfus Co. completes the group.
The merger is expected to create a US$25 billion entity, enhancing Bunge’s market access and opportunities for farmers and end-customers.
While the EU has approved the deal, global regulators have reacted differently. Canada’s antitrust authorities have expressed concerns about competitive harm due to Bunge’s existing interests in Canadian grain elevators. However, Brazil has approved the deal, and Australian regulators concluded that the acquisition would not negatively impact competition in their market.
Bunge has expressed satisfaction with the EU’s conditional approval, highlighting that the merger will boost market opportunities and benefit both farmers and consumers.
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