Wrap Text
GLN - Sale of 40% stake in Glencore Agricultural Products and creation of long-term partnership with CPPIB
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
HKSE Share Code: 805HK
ISIN: JE00B4T3BW64
Baar, Switzerland
6 April, 2016
Sale of 40% stake in Glencore Agricultural Products and creation of
long-term partnership with CPPIB
Glencore plc (“Glencore”) is pleased to announce that it has entered into a definitive agreement
with Canada Pension Plan Investment Board (“CPPIB”) for the purchase by a wholly owned
subsidiary of CPPIB of a 40% equity interest in Glencore Agricultural Products (“Glencore
Agri”), for an aggregate consideration of US$2.5 billion payable in cash upon closing, subject to
customary working capital closing adjustments (‘’the Transaction’’).
The Transaction values 100% of the equity in Glencore Agri at US$6.25 billion. As at 31
December 2015, the business had long-term debt of US$0.6 billion and working capital (net of
cash) of US$3.0 billion (including readily marketable inventories of US$2.5 billion) which it
intends to finance with short term debt on closing.
The Transaction is subject to customary regulatory approvals and closing conditions and is
expected to close during the second half of 2016. The proceeds from the Transaction will be
used by Glencore to reduce net indebtedness.
Glencore Agri is a differentiated and vertically-integrated business focused on the global
agricultural products value chain. Built around a network of high-quality origination and logistics
assets, comprising over 200 storage facilities, 31 processing facilities and 23 ports in strategic
locations around the world, Glencore Agri is well-positioned in key export regions and in the
trade of major agricultural commodities including grains, oilseeds products, rice, sugar, pulses
and cotton. In the year to 31 December 2015, Glencore Agri reported earnings before interest
and tax of US$524 million, and at 31 December 2015 had gross assets of US$10,187 million.
Upon closing, Glencore Agri will be governed by its own board of directors. CPPIB shall have
the right to appoint two directors to the Board of Glencore Agri alongside two Glencore-
appointed directors and the CEO, Chris Mahoney. At shareholder meetings Glencore and
CPPIB representatives shall vote in proportion to their shareholdings, subject to certain
reserved matters.
In addition, and consistent with the mutual commitment to a successful long-term partnership,
Glencore and CPPIB have agreed to an initial four year lock-up period subject to a carve-out
for Glencore to sell up to a further 20% stake. As well as customary exit provisions, including a
right of first refusal, each of Glencore and CPPIB may call for an initial public offering of
Glencore Agri after eight years from the date of closing.
Commenting on the Transaction, Ivan Glasenberg, CEO of Glencore, said:
“We are pleased to be partnering with CPPIB as we embark on the next stage of the
development of Glencore Agri. Under Glencore’s ownership the business has been
successfully rebased, particularly following the Viterra acquisition in 2012 and is well-positioned
to benefit from long-term global macro and sector trends. CPPIB have a proven track record in
the sector and share our vision for the future growth of the business through value-creating
organic and inorganic growth opportunities for the benefit of all stakeholders. We welcome
them aboard and look forward to continuing our good relationship as we work together.”
Commenting on the Transaction, Chris Mahoney, CEO of Glencore Agri, said:
“This is an important day in the evolution of Glencore Agri, and we look forward to working with
CPPIB to continue to build the Glencore Agri business over the long-term. 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.”
Commenting on the Transaction, Mark Jenkins, Senior Managing Director and Global Head of
Private Investments at CPPIB, said:
“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. Glencore Agri complements our existing portfolio of agriculture assets,
bringing global exposure, scale and diversification. In addition, Glencore Agri’s experienced
management team has a proven track record of growth, and combined with a successful
business model, we see this as a compelling opportunity that aligns with CPPIB’s long-term
investment horizon.
Barclays, Citi and Credit Suisse acted as joint financial advisers to Glencore. Linklaters LLP
provided legal advice to Glencore.
For further information please contact:
Investors
Martin Fewings t: +41 41 709 28 80 m: +41 79 737 56 42 martin.fewings@glencore.com
Elisa Morniroli t: +41 41 709 28 18 m: +41 79 833 05 08 elisa.morniroli@glencore.com
Media
Charles Watenphul t: +41 41 709 24 62 m: +41 79 904 33 20 charles.watenphul@glencore.com
Pam Bell t: +44 20 7412 3471 m: +44 77 3031 9806 pam.bell@glencore.co.uk
Barclays t: +1 212 516 7000
Sandeep Patel
Joseph Kinsey
Citi t: +44 20 7986 4000
Awais Kharal
Robert Way
Credit Suisse t: +44 20 7888 8000
Mark Echlin
Simon Taurins
www.glencore.com
www.youtube.com/glencorevideos
Notes for Editors
About Glencore:
Glencore is one of the world’s largest global diversified natural resource companies and a major producer
and marketer of more than 90 commodities. The Group's operations comprise around 150 mining and
metallurgical sites, oil production assets and agricultural facilities.
With a strong footprint in both established and emerging regions for natural resources, Glencore's
industrial and marketing activities are supported by a global network of more than 90 offices located in
over 50 countries.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation,
oil and food processing. We also provide financing, logistics and other services to producers and
consumers of commodities. Glencore's companies employ around 160,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the
International Council on Mining and Metals. We are an active participant in the Extractive Industries
Transparency Initiative.
About Canada Pension Plan Investment Board:
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization
that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of
19 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB
invests in public equities, private equities, real estate, infrastructure and fixed income instruments.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City and
São Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's
length from governments. At December 31, 2015, the CPP Fund totaled $282.6 billion. For more
information about CPPIB, please visit www.cppib.com or follow us on LinkedIn or Twitter.
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
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