Oilseed processor and fertilizer producer Bunge Ltd ended its planned $4.4 billion acquisition of Corn Products International Inc, five days after Corn Products' board withdrew support for the deal. Bunge could have forged ahead and forced Corn Products shareholders to vote on the deal, but the company decided call off the buy entirely.
While Bunge still believes the merger is warranted, the current credit and financial crisis makes the deal a victim of bad timing. Since the buyout was announced in June, Bunge's shares have plunged 64 percent and Corn Products shares have lost 43 percent of their value. To add, agriculture and fertilizer stocks plummeted, which signals that demand for raw materials will fall in the coming year.
"While we continue to believe in the long-term strategic benefits of a merger between Bunge and Corn Products, after careful consideration we have determined that it would not be in the best interests of our company or shareholders to pursue the transaction at this time," Bunge's Chairman and Chief Executive, Alberto Weisser, told Reuters News.
As a part of the original agreement, Corn Products is obligated to reimburse Bunge for up to $10 million of the costs and expenses incurred in connection with the transaction.