Wrap Text
GLN - Sale: additional stake in Glencore Agricultural Products to British Columbia Investment Management Corporation
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
9 June, 2016
Sale of additional 9.99% stake in Glencore Agricultural Products to
British Columbia Investment Management Corporation
Glencore plc (“Glencore’’) is pleased to announce that it has entered into a definitive agreement
with British Columbia Investment Management Corporation (“bcIMC”) for the purchase of a
9.99% stake in Glencore Agricultural Products (“Glencore Agri” or the “Business”) for an
aggregate consideration of US$624.9 million payable in cash upon closing.
The transaction values 100% of the equity in Glencore Agri at US$6.25 billion, after taking into
account indebtedness that the Business is anticipated to have at closing. This transaction is in
addition to the sale of a 40% stake in Glencore Agri to Canada Pension Plan Investment Board
for US$2.5 billion, which was announced on 6 April (prior announcement set out below).
Glencore will then hold a 50.01% stake and the Business will continue to be run by the existing
management team.
bcIMC will be able to appoint one director to the board of Glencore Agri and will be granted
certain reserved matter rights consistent with its shareholding. All the other details contained in
the 6 April announcement will continue to apply.
It is also anticipated that at closing of this transaction all of Glencore Agri’s debt (which currently
totals approximately US$3.6 billion and most of which is currently funded by Glencore) will be
assumed by Glencore Agri. It is expected that this financing, currently comprising around
US$0.6 billion of long term debt and US$3 billion of short term debt for financing of working
capital, will ultimately be funded by Glencore Agri without recourse to Glencore.
This transaction is subject to customary regulatory approvals and closing conditions and is
expected to close during the second half of 2016.
The US$3.124 billion of cash proceeds from these two transactions will be used by Glencore to
reduce net indebtedness. As a result of the two Glencore Agri transactions and the sale of
Komarovskoe for US$100 million, this year Glencore has entered into definitive agreements on
asset disposals totalling US$3.2 billion of its US$4-5 billion target for 2016.
Commenting on this transaction, Ivan Glasenberg, CEO of Glencore, said:
“We are pleased to welcome another long-term partner into Glencore Agri who shares our
vision to capture the significant opportunities we believe will emerge for Glencore Agri over
coming years. These transactions highlight the superior value of Glencore Agri, with its
advantaged asset footprint and business model, relative to its closest peers. We are very
excited that Glencore, as the largest shareholder in the business, will benefit from continued
growth of the Business with our new partners.”
Commenting on this transaction, Lincoln Webb, Senior Vice President, Infrastructure &
Renewable Resources of bcIMC, said:
"Our investment in Glencore Agri provides an excellent opportunity for bcIMC to increase and
diversify our exposure within the agricultural space, a sector we view as critical to supporting
rising levels of global prosperity. Investing with strong partners and alongside a world-class
management team, we believe our long-term investment views and global perspectives align
well with the further growth and development of a leading agricultural platform."
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
Carlos Francisco t: +41 41 709 23 69 m: +41 79 129 91 95 carlos.fernandez@glencore.com
Fernandez
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: +1 212 526 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.
Appendix - announcement of the previous transaction:
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.
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank Division)
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