Glencore PLC has announced that its grain handling investment, Viterra Ltd, has entered into an agreement to be acquired by New York-listed agricultural firm Bunge Ltd.

As part of the deal, Glencore will surrender its 50% stake in Viterra in exchange for USD3.1 billion worth of Bunge shares and USD1.0 billion in cash, granting Glencore a 15% stake in the combined group.

According to the media release, the acquisition of Viterra will result in the formation of a larger and more diversified business, poised for substantial synergies and potential re-rating. Glencore emphasized that it intends to retain its Bunge shares for at least 12 months following the completion of the deal.

Viterra shareholders will receive a combination of 65.6 million Bunge shares, valued at USD $6.2 billion, and USD $2.0 billion in cash. Bunge will also assume USD $9.8 billion in Viterra debt.

Upon completion of the transaction, Viterra shareholders will own 30% of the expanded company, with the possibility of increasing to 33% following Bunge's planned USD $2.0 billion share buyback.

The merger positions the combined entity as a leading pure-play agribusiness solutions company. The consolidation of Viterra and Bunge marks a milestone in the agriculture industry.