Bunge, Viterra in $18 bln merger to create agriculture trading powerhouse

CHICAGO, June 13 (Reuters) - U.S. grains merchant Bunge (BG.N) and Glencore (GLEN.L)-backed Viterra are merging in an $18 billion deal including debt, the companies said on Tuesday, creating one of the worlds largest agriculture trading firms.

The deal brings Bunge closer in global scale to leading rivals Archer-Daniels-Midland (ADM.N) and Cargill (CARG.UL) and will be examined closely by antitrust regulators.

Shares of Bunge fell 1.9% to $92.03 in premarket trading.

Viterra shareholders will receive about 65.6 million shares of Bunge stock, carrying a value of about $6.2 billion, and about $2.0 billion in cash. Bunge will also assume $9.8 billion of Viterras debt.

Bunge, whose market value is about $14 billion and carries debt net of cash of about $2.7 billion, will pay 75% of the deal with stock and 25% in cash, according to the statement.

Bunge is already the worlds largest oilseed processor and analysts said it and Viterras crushing businesses could face regulatory scrutiny in Canada and Argentina.

Bunge last year was the largest corn and soybean exporter from Brazil, the worlds top source of the staple crops for making animal feed and biofuels, according to data from shipping agent Cargonave. Viterra was the third-largest corn exporter and No. 7 soybean shipper.

Combined, the companies accounted for about 23.7% of Brazil corn exports in 2022 and 20.9% of Brazil soybean exports, Cargonave data showed.

In the United States, Viterras business of buying and selling grain expanded via its purchase of Gavilon last year. The merger would enhance Bunges grain exporting and oilseed processing businesses in the worlds No. 2 corn and soy exporter, where it has a smaller presence than ADM and Cargill.

The deal also expands Bunges physical grain storage and handling capacity in major wheat exporter Australia, where the company currently operates just two grain elevators and a port terminal in the western part of the country. Viterra has 55 storage sites in South Australia and western Victoria and six bulk grain export terminals.

The worlds top vegetable oils producer also entered partnerships with oil major Chevron (CVX.N) and seeds and chemicals giant Bayer (BAYGn.DE) to pursue soaring demand for renewable fuels feedstocks.

In Ukraine, the worlds top sunflower producer and largest supplier of sunflower oil, a combined Bunge-Viterra would have three oilseed processing plants across the countrys south and east, in Kharkiv, Dnipro and Mykolaiv.

Acquiring Viterra would bring Bunges revenue, which was $67.2 billion in 2022, more in line with that of ADM, which registered sales of nearly $102 billion last year.

In early 2017, Viterra, then known as Glencore Agriculture, attempted a takeover of Bunge, which was then valued at $11 billion. The attempted takeover was rebuffed.

The merger is expected to close in mid-2024, subject to the satisfaction of customary closing conditions, and it is expected to generate about $250 million of annual gross pre-tax operational synergies within three years.

Reporting by Karl Plume in Chicago and Arunima Kumar and Mrinalika Roy in Bengaluru