Escalating trade tensions between Washington and Beijing are casting a shadow over Bunge Global SA’s $8.2 billion acquisition of Glencore-backed Viterra, as Chinese regulators slow-walk the deal amid rising geopolitical and food security concerns.
Despite receiving antitrust clearance from the European Union and Canada, and progressing through the final stages of regulatory review globally, the transaction remains stalled in China, where authorities have not yet granted approval. Sources familiar with the matter say Chinese regulators are closely scrutinizing the merger’s potential impact on market concentration and national food security, highlighting the strategic importance of agriculture to Beijing, Bloomberg reported.
Political Climate Clouds Merger Path
The acquisition, announced in June 2023, would create a $25 billion agricultural powerhouse capable of rivaling industry giants like Cargill Inc. But recent deterioration in U.S.-China relations has complicated approvals. According to insiders, Bunge CEO Greg Heckman has made several visits to China in efforts to ease concerns and move talks forward.
“Constructive dialogue” with Chinese authorities is ongoing, Bunge said in a statement, though the company has already missed its mid-2024 closing target, along with two automatic extensions permitted under the merger agreement. If the deal fails due to regulatory issues, Bunge will be obligated to pay Viterra a $400 million breakup fee.
China’s Antitrust Review and Food Security Focus
While China rarely blocks foreign deals outright, its antitrust review process is known to be lengthy, especially when politically sensitive sectors like agriculture or technology are involved. Bunge’s existing footprint in China — including five oilseed processing plants — and Viterra’s crop marketing operations may have added complexity to the review.
Sources say Beijing is concerned that the merger would increase concentration in the global grain market, potentially giving a U.S.-based company too much sway over key food imports at a time when China’s food self-sufficiency strategy is a top policy priority.
Chinese authorities have imposed conditions on similar deals in the past. When Marubeni bought U.S.-based Gavilon in 2013, for example, China required the firms to maintain separate soybean trading operations for Chinese clients.
Global Footprint and Strategic Implications
Though Bunge is publicly listed in New York, it is domiciled in Switzerland, with trading operations based in Geneva. Approximately 80% of the combined Bunge-Viterra company’s processing capacity and more than 85% of its workforce would be located outside the United States, Bunge has emphasized.
The company argues the deal will strengthen global food security and improve resilience in agricultural supply chains. “This merger will benefit farmers and consumers by ensuring a stable, diversified and reliable global supply of key agricultural products,” Bunge said in a public statement.
Bunge, one of the storied “ABCD” firms (alongside Archer-Daniels-Midland, Cargill, and Louis Dreyfus), has a long history stretching back to its 1818 founding in Amsterdam. The firm has since operated across Latin America, the U.S., and Europe, with current headquarters in Chesterfield, Missouri.
Market Reaction
Bunge shares initially fell 2% on news of the delay but quickly recovered, trading up 0.3% by mid-day in New York. Market analysts say investor concern is tempered by the assumption that approval may still be possible, albeit with potential conditions imposed by Chinese regulators.
