Bunge-Viterra deal would create US$25B rival to Cargill

Commodity markets are bracing for a long-awaited deal that would create a US$25 billion behemoth capable of competing with the world’s biggest agricultural players.

U.S. crop merchant Bunge Ltd. is in talks with commodities giant Glencore Plc over a potential tie-up with its Viterra grains business. Following years of on-off talks, this time Bunge’s deal-making boss Greg Heckman, who oversaw a sharp turnaround at the once troubled crop trader, has the upper hand.

Combining the two would create a trader big enough to take on the industry’s elite: Minneapolis-based Cargill Inc. and Chicago’s Archer-Daniels-Midland Co. It would also complete Bunge’s renaissance under Chief Executive Officer Heckman, who transformed the company into a cash-rich oilseeds champion from an unprofitable business when he took over some four years earlier.

“The merger makes a lot of sense,” said Jonathan Kingsman, a former commodity trader who wrote the book Out of the Shadows: The New Merchants of Grain.  “You combine the biggest oilseed crusher in the world with a top grain trader.”