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Economic Concern Halts Bunge, Corn Products Merger
2008-11-13 10:32:00
Bunge Ltd, White Plains, NY, has called off its planned $4.4 billion acquisition of Corn Products International Inc, Westchester, IL, five days after Corn Products’ board withdrew support for the deal.
Bunge could have forced Corn Products shareholders to vote on the deal, but the company decided to call off the transaction completely, citing poor economic conditions.
Since the buyout was announced in June, Bunge’s shares have plunged 64% and Corn Products shares have lost 43% of their value. Agriculture and fertilizer stocks have also plummeted, signaling falling demand for raw materials in the coming year.
“While we continue to believe in the long-term strategic benefits of a merger between Bunge and Corn Products, after careful consideration we have determined that it would not be in the best interests of our company or shareholders to pursue the transaction at this time,” said Alberto Weisser, chairman and CEO with Bunge.
As a part of the original agreement, Corn Products is obligated to reimburse Bunge up to $10 million of the costs and expenses incurred in connection with the planned deal.
Bunge could have forced Corn Products shareholders to vote on the deal, but the company decided to call off the transaction completely, citing poor economic conditions.
Since the buyout was announced in June, Bunge’s shares have plunged 64% and Corn Products shares have lost 43% of their value. Agriculture and fertilizer stocks have also plummeted, signaling falling demand for raw materials in the coming year.
“While we continue to believe in the long-term strategic benefits of a merger between Bunge and Corn Products, after careful consideration we have determined that it would not be in the best interests of our company or shareholders to pursue the transaction at this time,” said Alberto Weisser, chairman and CEO with Bunge.
As a part of the original agreement, Corn Products is obligated to reimburse Bunge up to $10 million of the costs and expenses incurred in connection with the planned deal.
