by Investec Switzerland. Canada’s largest pension fund agreed to pay .5 billion for a minority stake in Glencore Plc’s agriculture unit as the commodity trader and miner works to reduce its debt burden. © Hopsalka | Dreamstime.com Canada Pension Plan Investment Board will acquire a 40 percent stake in the division which handles wheat, corn, barley, biofuels, cotton and sugar, according to a statement on Wednesday. The deal values the entire business at .25 billion, below a .5 billion valuation from Citigroup Inc. in September last year. The price “was the low end of our valuation range, but it is not necessarily a disappointment,” said Ben Davis, an analyst at Liberum Capital Ltd. in London who advises holding the shares. “Cash through the door remains key for Glencore.” The sale is part of a debt-cutting program Glencore Chief Executive Officer Ivan Glasenberg unveiled last year in a move to mitigate concern about the company’s capacity to pay down billion of debt as commodity prices tumbled. Canada Pension fended off other bidders that included Asian and Middle Eastern sovereign wealth funds and the state-owned Saudi Agricultural and Livestock Investment Co. By Jesse Riseborough and Javier Blas (Bloomberg) In 2014 Glencore employed 181,000 people across 50 countries and generated US$ 224 billion of revenue.
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Canada’s largest pension fund agreed to pay $2.5 billion for a minority stake in Glencore Plc’s agriculture unit as the commodity trader and miner works to reduce its debt burden.
© Hopsalka | Dreamstime.com
Canada Pension Plan Investment Board will acquire a 40 percent stake in the division which handles wheat, corn, barley, biofuels, cotton and sugar, according to a statement on Wednesday. The deal values the entire business at $6.25 billion, below a $10.5 billion valuation from Citigroup Inc. in September last year.
The price “was the low end of our valuation range, but it is not necessarily a disappointment,” said Ben Davis, an analyst at Liberum Capital Ltd. in London who advises holding the shares. “Cash through the door remains key for Glencore.”
The sale is part of a debt-cutting program Glencore Chief Executive Officer Ivan Glasenberg unveiled last year in a move to mitigate concern about the company’s capacity to pay down $30 billion of debt as commodity prices tumbled. Canada Pension fended off other bidders that included Asian and Middle Eastern sovereign wealth funds and the state-owned Saudi Agricultural and Livestock Investment Co.
By Jesse Riseborough and Javier Blas (Bloomberg)
In 2014 Glencore employed 181,000 people across 50 countries and generated US$ 224 billion of revenue. It is headquartered in the town of Baar in the canton of Zug, Switzerland.