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A new giant is born in the market

Нов гигант се ражда на пазара

A few days ago, it was leaked that Bunge and Viterra were negotiating a potential mega deal that would further consolidate the global agricultural trade and bring Bunge closer on a global scale to top rivals ADM and Cargill.

A merger of US grain trader Bunge with rival Viterra would grow the combined company's business in the US, Europe, Brazil and Australia and give it dominant positions in parts of Canada and Argentina, analysts say.

"Combining Bunge and Viterra in regions like North America and Europe will certainly strengthen the combined company's presence there and put them side by side with ADM," said Seth Goldstein, equity analyst at Morningstar.

In the US, Viterra's grain buying and selling business expanded through the purchase of Gavilon last year. The new merger would improve Bunge's grain export and oilseed processing business in a place where ADM and Cargill have a weaker presence, Goldstein said.

The merger will expand Bunge's physical grain storage and handling capacity in Australia (a global wheat exporter), where the company currently operates only two grain storage sites and a port terminal in the western part of the country.

Viterra has 55 storage locations in South Australia and Western Victoria and six bulk grain export terminals. The merger will also bring together Bunge, the world's largest oilseed meal producer, with Australia's largest protein flour importer, Viterra.

In Ukraine, the world's largest producer of sunflower and the largest supplier of sunflower oil, the combined Bunge-Viterra will have three oilseed processing plants in the south and east of the country - in Kharkiv, Dnipro and Mykolaiv.

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