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Glencore's long-term strategy could include selling Bunge stake

Glencore, a miner and trader, said that as part of its long-term plan it could sell its 16.4% stake at some point in the future in Bunge Global.

Glencore acquired the 16.4% after Bunge completed a long-delayed merger with Glencore-backed grain-handler Viterra in July. This was two years after the announcement of the $34 billion mega deal.

Gary Nagle, Glencore's CEO, told the media on Wednesday that "the agriculture business does not necessarily fit with our business model." This was after Glencore released its financial results for the first half. Glencore probably wouldn't want to hold a 16.4% stake in Bunge in the long run.

He said that Glencore was not in a hurry to sell its stake and that if they ever did, "we would do so in complete collaboration and in conjunction with Bunge's board and management".

Analysts say that the merger with Viterra has enhanced Bunge’s grain processing and export businesses in the United States, and it has expanded Bunge’s physical grain storage and grain handling footprints in Canada and Australia – two major wheat suppliers.

Glencore's goal is to maximize the value of the investment. "We would exit that at a future date very carefully and smartly to preserve that value," said the CEO.

Glencore stated on July 2, that the 16.4% of Bunge that it owned had a value of $2.6billion at the time the deal was closed. The miner viewed these shares as surplus capital. Reporting by Polina Devitt. Mark Potter edited the article.

(source: Reuters)