Glencore Announce $6 Billion Acquisition of Viterra

The company stated that Viterra’s portfolio will enable Glencore to build upon its position as one of the world’s largest commodity suppliers. Glencore claim they will be able to create more value for Viterra’s agricultural commodities by leveraging Glencore’s extensive global networks, expertise and best practices in order to create additional value across its agricultural businesses.

21 Mar 2012 --- Glencore, the world’s largest commodities trader, has announced that it is buying Canada’s leading grain handler, Viterra, in a cash deal valuing it at C$6.1bn ($6.2 bn).

Glencore already markets and produces crops as well as metals, minerals and oil, but the company has marked out agricultural commodities as an area for growth.

In an accompanying press release the company stated that the acquisition of Viterra is “consistent with Glencore’s strategy of strengthening its position as one of the global leaders in grain and oilseeds markets.”

The company stated that Viterra’s portfolio will enable Glencore to build upon its position as one of the world’s largest commodity suppliers. Glencore claim they will be able to create more value for Viterra’s agricultural commodities by leveraging Glencore’s extensive global networks, expertise and best practices in order to create additional value across its agricultural businesses.

It is thought that the company offered C$16.25 ($16.45) per Viterra share and that this offer has been unanimously approved by Viterra’s board.

Chris Mahoney, Director of Agricultural Products of Glencore said, “The acquisition of Viterra reflects our strong belief in the importance and future potential of the Canadian and Australian grain markets. This is an exciting opportunity to deliver the real benefits that can be generated through the combination of Glencore’s and Viterra’s respective assets, people and know-how to both farmers and customers in Canada, Australia and further afield.”

Mayo Schmidt, Viterra’s President and CEO said, "Viterra employees created a world class agri-business, of which I am very proud. This has been recognized by Glencore and its partners, and this transaction creates value and opportunities for employees, our communities, farmers and customers in all the markets we serve."

The rest of Viterra’s investors will vote on the deal at a special meeting expected in May.

Viterra will pay Glencore a C$185m ($187.3m) break fee if it accepts a better offer from another party, or if its board withdraws or modifies its recommendation.

Glencore would have to pay Viterra a C$50m ($50.6m) reverse break fee if the deal does not close for regulatory reasons.