May 23 (Reuters) – Shares of Bunge Ltd surged about 16 percent on Tuesday after a media report suggested the U.S. agribusiness is a takeover target of commodities trader Glencore PLC.
Glencore, owner of Viterra, is already a big player in Canadian agriculture.
“Glencore confirms that Glencore Agriculture Limited (Glencore’s non-consolidated agriculture joint venture) (GAL) has made an informal approach to Bunge Limited regarding a possible consensual business combination,” Glencore said in a news release.
“Following this informal approach from GAL, discussions may or may not materialise and there is no certainty that any transaction will occur.”
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Glencore Agriculture’s shareholders are Glencore, Canada Pension Plan Investment Board and British Colombia Investment Management Corporation.
It is unclear where any discussions between Glencore and Bunge stand and there may not be any deal, sources familiar with the matter told The Wall Street Journal. (http://on.wsj.com/2q7SZTI)
Shares of Bunge, which had a market capitalization of $9.84 billion as of Monday’s close, jumped 16 percent to $81.24.
The deal would make the Swiss mining and trading giant, Glencore, a major player in the U.S. agriculture market, the report said.
Bunge did not immediately return calls requesting comment.
The report comes amid heightened expectations of consolidation among large grain traders as a global oversupply and thin trading margins have squeezed the core grain trading operations of Bunge and rivals Archer Daniels Midland Co , Cargill Inc and Louis Dreyfus Co.
Bunge Chief Executive Officer Soren Schroder said earlier this month that the sector was ripe for consolidation and that Bunge is prepared to take the lead in any dealmaking.
