Bunge-Viterra merger delayed due to US-China tensions

The proposed $8.2B merger between Bunge Global and Glencore-backed Viterra is stalled due to trade tensions between the US and China. Bunge shares briefly dropped 2% before rebounding 0.3%. China has not approved the deal and the US government is also reviewing it. The merger is a significant move in the global commodities market.

The proposed $8.2 billion merger between Bunge Global and Glencore-backed Viterra is experiencing significant delays due to ongoing trade tensions between the United States and China. The merger, initially expected to close in mid-2024, is now facing potential setbacks as regulatory approval from China remains a hurdle.

According to sources familiar with the situation, Bunge has already secured most of the necessary global approvals for the merger, including those from the European Union and Canada. However, obtaining regulatory approval from China remains one of the last obstacles before the deal can be finalized [1].

The political discord between the United States and China has raised concerns among Bunge executives and advisers that the political rift could cause further delays. Bunge CEO Greg Heckman has made several trips to China to hold discussions with authorities, highlighting the significance of the deal for both companies and the global commodities market [2].

China has not yet approved the merger, with regulators conducting a thorough compliance review due to concerns about increased industry concentration and potential impacts on Beijing’s food security interests. The deal would create a global crop trading and processing giant, potentially challenging industry leaders Archer-Daniels-Midland and Cargill [3].

The delay in the merger has had an immediate impact on Bunge's stock. Shares briefly dropped 2% following the news but quickly rebounded to be up 0.3% as of 12:20 p.m. in New York. The company operates about five oilseed plants in China, while Viterra has a crop marketing unit there [2].

While the merger has received approvals from various regulatory bodies, the US government is also reviewing the deal. The potential implications of the merger on the global commodities market and food security have drawn attention from regulators worldwide.

References:
[1] https://www.investing.com/news/stock-market-news/bunge-merger-with-viterra-reportedly-delayed-due-to-uschina-trade-tensions-93CH-4020659
[2] https://www.mining.com/web/us-china-tensions-stall-bunges-8-2-billion-viterra-deal/
[3] https://www.producer.com/news/bunges-merger-with-viterra-stalled-by-us-china-trade-tensions-bloomberg-reports/