Wednesday, agribusiness and food company Bunge Limited (BG) said that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 relating to Bunge's proposed merger with Corn Products International, Inc. (CPO) has expired, thereby satisfying a condition to the closing of the transaction.
The transaction remains subject to the satisfaction of other customary closing conditions, including receipt of non-U.S. regulatory clearances, as well as approval by the shareholders of both companies. The transaction is expected to close in the fourth quarter of 2008.
Late June, White Plains, New York headquartered Bunge Ltd. announced a deal to acquire Corn Products for about $4.8 billion, including the assumption of Corn Products' net debt of about $414 million.
Under the terms of the deal, Corn Products stockholders will receive common shares of Bunge with a market value of $56 for each common share of Corn Products. Upon the completion of the transaction, Corn Products will become a wholly owned subsidiary of Bunge and Corn Products stockholders will own about 21% of Bunge's fully diluted shares. Corn Products' Chairman, President and Chief Executive Officer Sam Scott is expected to join Bunge's Board.
With the acquisition, Bunge expects to achieve estimated annual cost synergies and incremental profit opportunities of $100 million to $120 million. Bunge also expects savings in areas such as procurement, logistics and elimination of duplicate costs. Additionally, the all-stock transaction strengthens the company's balance sheet for future growth.
Corn Products will maintain its operational headquarters in Westchester, Illinois, and continue its commitments to the local communities using the Corn Products brand name.
BG is currently up $0.36 or 0.42% and trades at $85.41. CPO is currently up $0.19 or 0.44% and trades at $43.10.
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