TWO leading grain businesses have agreed to form a new agricultural trading powerhouse worth around £27 billion.

Bunge, a US grain merchant, announced it has entered into an agreement with Viterra Ltd, a Canadian grain handling business backed by Glencore Plc.

They say the merger will create a new global agribusiness company.

It follows Bunge posting record adjusted profits in 2022, as the firm benefitted from tight global grain supplies due to Russia’s invasion of Ukraine.

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Viterra shareholders will receive around 65.6 million shares of Bunge stock, with an aggregate value of approximately £4.9 billion, as well as £1.6 billion in cash.

Bunge’s CEO, Greg Heckman, said: “The combination of Bunge and Viterra significantly accelerates Bunge’s strategy, building on our fundamental purpose to connect farmers to consumers to deliver essential food, feed and fuel to the world.

"Our highly complementary asset footprints will create a network that connects the world’s largest production regions to areas of fastest growing consumption, enhancing the geographical balance and adaptability of our global value chains and benefitting farmers and end-customers."

He added: "With a diversified global mix of earnings across processing, handling and merchandising, and value-added products, we will increase the resiliency of our cash flow generation.

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"Together, we will be positioned to increase our operational efficiency while innovating to address the pressing needs of food security, efficiency for end-customers, market access for farmers, and sustainable food, feed and renewable fuel production.”

Viterra’s CEO David Mattiske, said: “In combining our highly complementary origination, processing and distribution networks, we are better positioned to meet the increasing demand for the food, feed and fuel products we offer.

"Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business.

"We look forward to joining with the Bunge team as we enter this next chapter, creating new opportunities for our people."