Market News & Headlines >> Bunge Stock Soars on Merger Talk

Shares of Bunge Ltd. surged by as much as 17.6% on Tuesday in the wake of a Wall Street Journal report that the agribusiness conglomerate had been approached by Swiss mining and commodities trading giant Glencore Plc, about a possible takeover bid. 

Bunge shares finished 16.6% higher on the day, but the company said late on Tuesday, that it was not involved in any talks with either Glencore Plc or Glencore Agriculture Ltd. Earlier on Tuesday, Glencore had said in a statement that its agricultural unit had made an informal approach to commodities trader Bunge Ltd BG.N about a "possible consensual business combination."  Glencore also said "discussions may or may not materialise and there is no certainty that any transaction will occur."

Expectations for consolidation in the grain handling industry are high as Bunge and its main competitors, ADM, Cargill Inc. and Louis Dreyfus, have seen their margins squeezed amid the global glut of grain supplies. 

Bunge Chief Executive Officer Soren Schroder said in a May 3 conference call with analysts that it was “becoming more obvious” that “consolidation, in whichever form” is needed in the grain handling or global distribution sector. “There's plenty of room to consolidate. And we're happy to participate and ... can lead it," Schroder said.