US-China tensions stall Bunge’s Viterra deal

U.S.-China trade tensions are holding up agricultural trader Bunge Global SA’s $8.2 billion takeover of Glencore Plc-backed Viterra, according to people familiar with the matter.

China has yet to approve the deal, and Bunge executives and advisers are increasingly concerned that the political rift will continue to stall the process, said the people, who asked not to be identified because they were not authorized to discuss the merger. Chief Executive Officer Greg Heckman has traveled to China several times to talk with authorities, the people told Bloomberg.

Bunge is in the final stages of seeking regulatory approval and has had “constructive dialogue” with Chinese officials, the company said in a statement to Bloomberg.

The company has already missed its original deadline to close the deal by mid-2024. It has also missed two automatic three-month extensions in the agreement. If the deal falls through due to a lack of antitrust approval, Bunge would have to pay Viterra a $400 million termination fee.

It’s unusual for Chinese reviews of foreign takeovers to drag on. But the recent deterioration in U.S.-China relations and President Donald Trump’s massive trade tariffs have become a tipping point for the merger.

The deal has already been greenlit by the European Union and Canada, where there have been concerns about the impact on competition. Argentina has yet to weigh in, but the South American country’s antitrust laws allow the deal to go through, with any corrective action likely to be required later.

Bunge shares fell 2% on the news, then quickly pared their losses. The stock was up 0.3% as of 12:20 p.m. in New York. The company operates about five oilseed crushing plants in China, and Viterra has a crop marketing unit there.

Although listed in New York, Bunge is incorporated in Switzerland, with its commodities trading desk based in Geneva. About 80% of the combined Bunge-Viterra’s refining capacity will be located outside the U.S., as will more than 85% of its employees.

Tags: China, Bunge, Viterra, Canada, USA