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Global agribusiness giant Bunge has entered merger discussions with Glencore’s agriculture division Viterra, Bloomberg reported.

The companies were negotiating the structure of a potential transaction, according to sources quoted in the 25 May report.

One option under discussion was a stock deal which would involve Bunge shareholders owning a majority of the combined group, the sources told Bloomberg.

Glencore had considered the idea of a deal with Bunge in the past and there was no certainty an agreement would be reached on this occasion, the sources said.

In 2017, Glencore had approached Bunge about a friendly takeover but that was rejected by the US company, Bloomberg wrote. Since then, Bunge had replaced its CEO and other senior executives, the report said.

“I think the current management team would be more open to a merger with Glencore, which is a stark contrast from the former management team, who appeared to not even entertain an offer,” Seth Goldstein, a strategist at US financial services company Morningstar Inc, was quoted as saying.

The discussions were ongoing and the structure of the deal could change or talks could fall apart, the sources said.

Representatives for Bunge, Glencore and Viterra declined to comment, Bloomberg wrote.

Glencore acquired Viterra for US$4.5bn in a 2012 deal that gave it grain assets in Canada and Australia, the report said. Around four years later it sold stakes totalling approximately half of the business to Canada Pension Plan Investment Board and British Columbia Investment Management Corp.

“The merger makes a lot of sense — you combine the biggest oilseed crusher in the world with a top grain trader,” Jonathan Kingsman, a former commodity trader and author of Out of the Shadows: The New Merchants of Grain, was quoted as saying. “The cultural match could be challenging though.”

Last year, Viterra acquired the grain and ingredients business of US oilseed and ingredients firm Gavilon from Marubeni for US$1.1bn, the report said.

A Viterra-Bunge merger would create overlap in countries where both companies operated, such as Canada, Bloomberg wrote.

It was unclear how regulators would view a deal if one was agreed, Morningstar’s Goldstein was quoted as saying.

“The industry is already fairly concentrated, so some divestitures may be required, which could reduce potential synergies,” Goldstein said.

According to its website, Rotterdam-based Viterra – which is part-owned by Switzerland-based Glencore and formerly known as Glencore Agriculture – operates more than 30 processing and refining facilities in 11 countries. These include 13 oilseed crushing plants, 12 processing mills, six biodiesel processing facilities and two sugarcane mills.

St Louis-based Bunge’s oilseed processing capacity covers South America, North America, Europe and Asia-Pacific, including both soyabean crushing and soft seed crushing, according to its website.