(Bloomberg) — Bunge Global SA’s planned US$8.2 billion buyout of Viterra Inc. is set to be approved by the European Union after concessions offered by the firms look to have appeased regulator concerns.
The tie-up, announced in June last year, will see Bunge buy Glencore Plc-backed Viterra in stock and cash, with the U.S. crop trader owning about 70 per cent of the combined entity. It would become the world’s second-biggest agricultural trading company by revenue, dominating the soybean and wheat markets.
Last month, the European Commission’s merger enforcers opened a preliminary investigation into the deal, and raised concerns over how the deal could impact competition in Poland and Hungary. Bunge offered commitments in response to the EU concerns, including divestments of all of Viterra’s crush and refining capabilities for certain oilseeds in the two countries.
Those remedies have won over EU officials who are likely to conditionally approve the deal by a current deadline of Aug. 1, according to people familiar with the matter who spoke on condition of anonymity.
An EU spokesperson declined to comment, as did Bunge representatives. Viterra didn’t immediately respond to requests for comment.
Bunge is ‘B’ in the ABCD quartet of agricultural commodity traders that have dominated crop markets for over a century. The deal to acquire Viterra would create a $25 billion giant capable of competing with the industry’s elite: Cargill Inc. and Archer-Daniels-Midland Co., the ‘A’ and the ‘C.’ Louis Dreyfus Co. represents the ‘D.’
Bunge’s planned Viterra deal has faced mixed reactions from global regulators. In April, Canada’s antitrust watchdog said the deal would cause substantial harm to competition because of Bunge’s ownership stake in a competing network of western Canadian grain elevators.
More recently, Brazil approved the deal, while the Australian watchdog said in December that the acquisition isn’t likely to harm competition in the country.
In recent years, EU enforcers have taken a robust approach toward the agriculture sector deals, including a $66 billion tie-up between Bayer AG and Monsato, which was eventually cleared by EU regulators after an extensive divestiture remedy was imposed.
With assistance from Gerson Freitas Jr.
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