BRAZIL – Bunge Limited has agreed to sell its margarine and mayonnaise assets in Brazil to Seara Alimentos S.A., in a move that seeks to streamline the company’s operation in the country.
The transaction includes three production plants and the brands used for these two products. As part of this deal, the companies have also negotiated supply, toll manufacturing and brand license agreements.
Other branded products including packaged oils, shortenings and specialty oils will remain in Bunge’s portfolio.
“This transaction further streamlines our operations in Brazil around our core capabilities, while providing good value for a solid business,” said Greg Heckman, Bunge’s Chief Executive Officer.
“It also represents another incremental step in executing a key priority of optimizing our overall portfolio.”
The completion of the sale is subject to regulatory approval. Financial details of the transaction were not disclosed.
Bunge sells stake in North American ethanol plant
The company has also agreed to sell its stake in an ethanol plant in Iowa, US to Southwest Iowa Renewable Energy (SIRE) ending Bunge’s 13-year ownership interest in SIRE.
As part of the transaction, the two Series B directors appointed by Bunge, Andrés Martín and Brett Caplice, resigned from the SIRE board. The two companies also revised commercial agreements.
“Since we first partnered in 2006 and in the following years, through construction and ethanol industry challenges, Bunge has been an invaluable partner for SIRE,” said Karol King, chairman of SIRE.
“In particular, SIRE benefited throughout the years from commercial agreements for corn origination and products and in having two Bunge board members, who provided international agribusiness insight to our business.
“SIRE is very pleased today to be in the position to go forward as an entity wholly-owned by our farmer and community members, with Bunge’s ongoing support for our ethanol marketing.”
In addition to the stock repurchase, SIRE will assume responsibility for originating corn and selling dried distillers grains produced by the plant.
Under a revised agreement, Bunge will continue to purchase all the ethanol produced by SIRE. SIRE also will continue to lease rail cars from Bunge under existing lease agreements.
“As Bunge focuses our resources on our core businesses, selling our shares in SIRE, while maintaining a relationship, is an attractive opportunity,” said Andrés Martín, North America country manager for Bunge.
“Bunge is proud to have been a partner in building and operating this successful ethanol plant and we look forward to continuing to work with the SIRE team.”