06 Apr Glencore agrees $2.5bn agriculture sale to cure debt
Glencore (LSE:GLEN) has reached a US$2.5 billion agreement with Canada Pension Plan Investment Board (CPPIB) to sell a 40 per cent stake in Glencore Agricultural Products.
The sale is expected to close in the second half of 2016 and the proceeds will be used to trim Glencore’s $30 billion debt pile.
The transaction values Glencore’s agricultural business at $6.25 billion. As of December 2015, Glencore Agri had long-term debt of $0.6 billion and working capital of $3 billion.
“CPPIB have a proven track record in the sector and share our vision for the future growth of the business through value-creating organic and inorganic growth opportunities for the benefit of all stakeholders,” said Glencore CEO Ivan Glasberg.
“Under Glencore’s ownership the business has been successfully rebased, particularly following the Viterra acquisition in 2012 and is well-positioned to benefit from long-term global macro and sector trends. “
Mark Jenkins, senior managing director at CPPIB, said: “Glencore Agri complements our existing portfolio of agriculture assets, bringing global exposure, scale and diversification.
“In addition, Glencore Agri’s experienced management team has a proven track record of growth, and combined with a successful business model, we see this as a compelling opportunity that aligns with CPPIB’s long-term investment horizon.”