Bunge says not in talks with Glencore following approach

Wed May 24, 2017 4:07am EDT
 
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By Karl Plume

CHICAGO (Reuters) - U.S. grains trader Bunge Ltd (BG.N: Quote) said on Tuesday it was not in talks with Swiss mining and commodities group Glencore Plc (GLEN.L: Quote), after the latter said it had made an informal approach to discuss "a possible consensual business combination."

Both statements were triggered by a Wall Street Journal story that stated that Glencore had made a takeover approach to Bunge. Bunge shares ended trading in New York up 16.6 percent at $81.70, giving the company a market capitalization of $11.4 billion, on investor expectations of a possible deal.

However, Bunge subsequently said it was not engaged in business combination discussions with either Glencore or Glencore Agriculture Ltd, a joint venture owned by Glencore and two Canadian pension funds.

Glencore had said in its statement earlier that "discussions may or may not materialize and there is no certainty that any transaction will occur."

In a sign of its limited appetite to negotiate a sale to Glencore, Bunge said it was "committed to continuing to execute its global agri-foods strategy and pursuing opportunities for driving growth and value creation."

Prior talks between Glencore and Bunge focused on a partnership in North America rather than the sale of Bunge, according to people familiar with the discussions, who requested anonymity to disclose them. Glencore also expressed interest in an acquisition of Bunge, however Bunge did not wish to pursue it, one of the sources added.

Glencore's interest in Bunge fueled ongoing speculation that, after a string of poor results, the world's big grain trading houses are ripe for a wave of consolidation similar to the mergers and acquisitions in the farm chemicals and seed industries.

Bunge shares were down 3.4 percent at $78.95 in after-hours trading in New York on Bunge's statement.   Continued...

 
FILE PHOTO - The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, September 30, 2015.   REUTERS/Arnd Wiegmann/File Photo