Reports > Infrastructure

Large-scale mergers anticipated to result in significant upheavals in the global grain market

2023.12.13 Jae-ho Jung

Unprecedented large-scale mergers and acquisitions are taking place in the global grain market, signaling significant shifts among major grain companies. With this deal set to dominate 40% of the soybean market, countries like Argentina and Canada are hinting at conducting antitrust investigations. In light of this, it is essential to analyze and monitor assets that could be utilized to enhance the competitiveness of domestic grain procurement, contributing to the resolution of antitrust issues.

Executive Summary

  • The merger of Bunge with Viterra, Glencore's grain subsidiary, heralds the creation of a Global Top 2 giant in the grain industry with total assets of $34 billion.

  • The merger is expected to achieve pre-tax profits of approximately $2.5 billion within three years through synergies with Viterra, exercising dominance in the global markets for soybeans and wheat.

  • Antitrust investigations in key soybean production and distribution markets such as Canada, Argentina, the United States, and Europe may necessitate structural adjustments, including the partial divestment of assets held by both companies.

  • Continuous monitoring is essential in the ongoing restructuring process, especially considering the high dependence on imports and the need for stability in the soybean processing industry to ensure a stable supply of soybeans and other crops in the domestic market.