The world of agricultural-commodity trading could be upended with the merger of two of its biggest names. Archer-Daniels-Midland Co. has sought deal talks with Bunge Ltd., a person briefed on the matter said at the weekend. That’s less than a year after Glencore approached Bunge about a deal.
ADM and Bunge have been around for 116 years and 200 years respectively and are among the very largest buyers and sellers of grains and other crops. … On paper at least, a combined ADM-Bunge would be both a commodity-trading giant, with an international network of barges and marine terminals, and a major industrial enterprise with factories and refineries.
Where they really differ is geographic footprint. Bunge has a much larger presence in South America, while ADM is bigger in the U.S. Combining the two would create a company that, at least in terms of revenue, would be approaching the size of Cargill Inc., the largest agricultural company.
If an ADM-Bunge tieup were to happen, regulators are likely to take a close look at the combined company’s market share, especially in its domestic market.
