EU approves Bunge's Viterra acquisition with conditions
Both Bunge and Viterra are global agribusinesses involved in sourcing, trading, and processing agricultural products, with significant operations in rapeseed, soybean, and sunflower seeds.
The Commission's investigation found that the acquisition would reduce competition in the oilseeds market, affecting products like animal feed, cooking oils, and biodiesel. This was especially concerning in Central Europe, where both companies are major players throughout the supply chain.
Asset divestment
To address these concerns, Bunge and Viterra agreed to sell all of Viterra's oilseed businesses in Hungary and Poland, along with related logistical assets. These commitments eliminate the competitive overlaps and connections between the companies in these regions.
After reviewing market feedback, the Commission concluded that the deal, with these adjustments, would not harm competition. An independent trustee will ensure these conditions are met.
Nevertheless, the deal has raised concerns from the Canadian competition watchdog and farm groups, and requires regulatory approval in North America, South America, and China.
Ongoing engagement with authorities
Bunge CEO Greg Heckman mentioned during last week's earnings call that the company is actively engaging with relevant authorities in the remaining jurisdictions. He expressed confidence that no significant issues would impact the deal's economics.
“The team has done a great job on the integration plans, on preparing for the finance and the capital structure and the plans around the leadership team. We have to continue to operate as separate companies until we are able to close the transaction.
“We are making progress and expect to conclude [the process] in the next couple of months.”
The combining of both companies’ operations will see diversification across assets, supply chains, geographies, and crops, and will create an entity to rival Cargill and ADM.
Rotterdam, Netherlands-based Viterra, which is part owned by Swiss mining and commodity company, Glencore, is a top-five global trader in sourcing oilseeds, such as soy, rapeseed and sunflower, and grains, including wheat, corn, and barley, which are complemented by sugar, pulses, and cotton.
Missouri, US-headquartered Bunge has almost 23,000 employees working across 300 facilities located in more than 40 countries. It is the world's largest oilseed processor and is also a producer and supplier of specialty plant-based oils and fats.
