Buyers circle as ADM joins Glencore in race for Bunge

22 Jan 2018 | Tom Houghton

US agribusiness major Archer Daniels Midland (ADM) has made an approach to buy rival Bunge, setting up the possibility of a bidding war with rival Glencore Agriculture, according to media reports.

Bunge’s share price leapt as the news broke late Friday, jumping 12% at one stage and gaining a further 1% on Monday’s open.

Should it come to fruition, the move would create one of the world’s biggest agricultural players, with ADM valued with a market capitalisation of $23.5 billion and Bunge at more than $11 billion.

Both Bunge and ADM were contacted for comment by Agricensus, but none was forthcoming at the time of going to press.

The move follows an informal attempt from Glencore Agriculture to buy Bunge in May 2017, which was rebuffed.

Despite a moratorium between Bunge and Glencore which would suspend any further takeover attempt until February, subsequent market speculation of Bunge selling up was rife.

A change to Bunge’s senior management compensation structure in November fuelled further speculation of an impending takeover.

ADM and Bunge are two of the four companies, along with Cargill and Louis Dreyfus, which make up the so-called ABCDs – the world’s largest agricultural trading houses.

Consolidation has been a hot topic in the agriculture industry in recent years, as shrinking margins and growing production yields have reduced market volatility and put a strain on profits.

Chinese giant Cofco International bought into rival trade houses Nidera and Noble, while Bunge itself recently acquired a majority stake in edible oil producer IOI Loders Croklaan.