Glencore International AG is in exclusive talks with Viterra Inc. over a deal to buy the Canadian grain handler, according to a person familiar with the situation, moves forward with a process begun earlier in the month to explore bids.
Viterra shares – currently trading at a market capitalization of just above C$6 billion ($6 billion) – were briefly halted in Toronto trading. After issuing a statement confirming exclusive discussions with an unnamed third party, shares resumed trading.
Glencore had been seen as a likely bidder for Viterra ever since the Regina, Saskatchewan, company first disclosed it had received expressions of interest earlier this month. Last week, the company said it had set up a formal process to evaluate bids.
Still, a purchase of Viterra would be an aggressive bet for Glencore, which is in the midst of trying to seal a $90-billion merger with Anglo-Swiss miner Xstrata PLC. That deal needs to be approved by shareholders of Xstrata, some of whom have recently said the proposed price, denominated in Glencore shares, is too low.
Glencore is one of the world’s largest commodity traders. It went public last year largely to make it easier for the company to expand through acquisitions.
Viterra operates grain-marketing and distribution businesses across Canada, the U.S., Australia, New Zealand and China. It also sells agricultural equipment, fertilizers, seed and pesticides to farmers.
In its brief statement, Viterra said it couldn’t give any assurance that a deal would be completed, or at what price. Some Viterra shareholders have said they believe the company’s shares should fetch a price in the high teens.