The deal is a sign that rising global demand for food is pushing big agricultural companies to look for increased scale, The Wall Street Journal said Monday (June 23, 2008).

 

The deal would join two of the oldest US agricultural businesses and establish Bunge as a big player in finished corn products such as starches and sweeteners.

 

Bunge would exchange each share of Corn Products for US$56 in stock, the Journal reported, saying the deal would represent a 31-percent premium to Corn Products' closing share price of US$42.90 on Friday (June 20, 2008) and a 25-percent premium to the stock's average price over the last 20 trading days.

 

Bunge also plans to raise its 2008 per-share earnings forecast to US$9.35 - US$9.65 from US$7.10 - US$7.40, discounting the effects of the acquisition.

 

Analysts were expecting Bunge to earn US$7.59 a share in 2008, according to Reuters Knowledge.

 

Bunge Ltd. is a global agribusiness and food company divided into three division. The agribusiness segment, which accounts for 56 percent of the company's operating profit in 2002, is comprised of three business lines which are grain origination, oilseed processing and international marketing.