According to insider sources, the two companies are in advanced talks about a possible deal. The finer details of the deal are still unknown. However, any acquisition would likely face antitrust complaints in the U.S. and other countries.
To get around the antitrust complaints, it’s possible that Bunge Ltd and Archer Daniels Midland Co would consider selling some of their assets. This could be a benefit to rivals in the agriculture business, such as Louis Dreyfus Co. and Cargill Inc.
A possible merger between Bunge Ltd and Archer Daniels Midland Co could really help the former, which has been struggling of late. The company’s market value is $11.5 billion, while ADM carries a market value of roughly $23 billion, reports Bloomberg.
This isn’t the first that we’ve heard about a possible offer from Archer Daniels Midland Co for Bunge Ltd. These other reports came out in January and said that BG may not respond to the offer. While its still uncertain how much ADM would be willing to pay for BG stock, some estimates put it at $100 per share. BG stock was trading for $78.60 when the markets closed on Friday.
Glencore PLC is another company that recently made an offer for Bunge Ltd, but it was shot down. It was thought that the offer from ADM may have been an effort to buy BG while Glencore couldn’t respond, but that restriction lifted on Feb. 1.
BG stock was up 4% and ADM stock was up slightly as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.