CPPIB makes $2.5B deal for Glencore

The Canada Pension Plan Investment Board has announced a $2.5-billion deal to acquire 40 per cent of agricultural company Glencore Agricultural Products.

The CPPIB expects the acquisition from Switzerland-based Glencore PLC to close in the second half of 2016. Glendora Agricultural Products is a grain and oilseeds company primarily focused on grains, oilseeds products, rice, sugar, pulses and cotton whose activities include processing, storage, logistics and marketing.

“As an asset class, agriculture is an excellent fit for a long-term investor like CPPIB, and we are excited about the opportunity to acquire a significant stake in Glencore Agri, a leading agricultural business,” said Mark Jenkins, senior managing director and global head of private investments at the CPPIB.

The agricultural company’s portfolio includes agriculture infrastructure assets in Canada and Australia and operations in South America and Europe. It employs more than 12,000 people and operates across more than 30 countries.

“With the investment potential created by this partnership and given the existing network of high-quality origination, logistics and port assets in key export regions, the business is now well-placed to take advantage of the significant opportunities that are expected to emerge across the sector in the coming years,” said Chris Mahoney, chief executive officer of Glencore Agricultural Products.

In announcing the deal today, the CPPIB also noted the increasing demand for food  due to population growth. “Glencore Agri complements our existing portfolio of agriculture assets, bringing global exposure, scale and diversification,” said Jenkins.