Glencore approaches Bunge on possible takeover

Reuters — Glencore Plc said on Tuesday its agricultural unit has made an informal approach to commodities trader Bunge Ltd. about a “possible consensual business combination,” the company said in a statement.

The commodities trading firm did not say more about a potential offer that its Glencore Agriculture unit made to Bunge.

Glencore, whose Canadian agribusiness assets include major Prairie grain handler Viterra, also said “discussions may or may not materialize and there is no certainty that any transaction will occur.”

Shares of Bunge surged earlier on Tuesday after the Wall Street Journal reported Glencore has approached the U.S. agribusiness group about a takeover.

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It was unclear where discussions between the companies stand and there may not be any deal.

Bunge, whose Canadian businesses include oilseed crushing and processing and a joint stake in Prairie grain handler G3 Canada, declined to comment.

The report comes amid heightened expectations of consolidation among large grain traders as a global oversupply and thin trading margins have squeezed the core grain trading operations of Bunge and rivals Archer Daniels Midland, Cargill and Louis Dreyfus.

Bunge CEO Soren Schroder said earlier this month that the sector was ripe for consolidation and that Bunge is prepared to take the lead in any dealmaking.

Bunge had a market capitalization of US$9.84 billion at Monday’s close. Shares jumped as much as 17.6 per cent to a 2-1/2-month high, and were up 16 per cent, the biggest share gain in more than eight years, at US$81.28 at midafternoon.

A deal would make Glencore, the Swiss mining and trading giant, a major player in the U.S. agriculture market, the Journal reported.

Reporting for Reuters by Karl Plume in Chicago, Chris Prentice in New York and Sruthi Shankar in Bangalore. Includes files from Network staff.

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