By Lisa Kerner
Charlotte, N.C., June 23 - Bunge Ltd. agreed to acquire Corn Products International, Inc. for $4.8 billion including assumption of about $414 million of Corn Products' net debt, it was announced on Monday.
Both companies' boards of directors approved the merger, which is expected to close in the fourth quarter of 2008, a joint company news release stated.
Under the companies' definitive merger agreement, Corn Products stockholders will receive a fraction of a common share of Bunge determined by dividing $56.00 by the volume-weighted average closing price of a Bunge common share on the New York Stock Exchange for the 15 trading days ending on the second trading day prior to the date of the Corn Products stockholders meeting.
If this average closing price is equal to or greater than $133.10, each share of Corn Products common stock will be exchanged for 0.4207 of a Bunge common share.
Bunge said if the average closing price is equal to or less than $108.90, each share of Corn Products common stock will be exchanged for 0.5142 of a Bunge common share.
A $110 million termination fee is included in the merger agreement, it was reported in a form 8-K filed with the Securities and Exchange Commission.
Once the transaction is complete, Corn Products will become a wholly owned subsidiary of Bunge stockholders and its stockholders will own about 21% of Bunge's fully diluted shares, according to the release.
"Corn Products is the leading pure-play franchise in corn refining and will add higher-margin starch and sweetener products to Bunge's product portfolio, expand our operations in important growth markets, and diversify our revenue stream with a solid cash flow business," Bunge chairman and chief executive officer Alberto Weisser said in the release.
Corn Products president and CEO Sam Scott will join Bunge's board of directors.
The corn refiner will maintain its operational headquarters in Westchester, Ill., and continue to use the Corn Products brand name.
With the merger, Bunge expects to achieve estimated annual cost synergies and incremental profit opportunities of $100 million to $120 million.
Bunge, a White Plains, N.Y., agribusiness and food company, was advised by Credit Suisse Securities (USA) LLC and Morgan Stanley and Co. Inc.
Lazard is advising Corn Products. J.P. Morgan Securities Inc. provided a fairness opinion to the Corn Products board.
| Acquirer: | Bunge Ltd.
|
| Target: | Corn Products International, Inc.
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| Announcement date: | June 23
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| Transaction total: | $4.8 billion
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| Price per share: | Common shares of Bunge with a market value of $56.00
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| Termination fee: | $110 million
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| Expected closing: | Fourth quarter of 2008
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| Stock price for acquirer: | NYSE: BG: $122.17 on June 20
|
| Stock price of target: | NYSE: CPO: $42.90 on June 20
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