London – Glencore’s takeover approach for US grain trader Bunge highlights how much the Swiss commodity giant is longing to increase its dominance in the Americas and bust up the stranglehold exerted on the industry by four key players.
Glencore said in a statement on Tuesday it approached Bunge about a potential “consensual business combination” and there’s no certainty that a deal will happen. Shares of the US company surged, giving it a market value of $11.5bn. Bunge later said it isn’t engaged in “business combination discussions” with Glencore or the company’s agriculture unit.
A combination, if it happens, would create one of the world’s largest agricultural traders, with assets in locations including Brazil, Australia, Russia and Canada. It would be a powerhouse in soybeans, wheat and sugar, with a large presence in the trade flows between Latin America and food importing nations such as China.