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Bunge reviews strategic options for Brazil sugar arm, including sale
Friday 25 October 2013

25 October 2013 - US agribusiness Bunge Ltd (NYSE:BG) said that it had launched a review of strategic alternatives for its struggling Brazilian sugar milling operations, including a sale, in an effort to maximise value for shareholders.

The company made the statement as it unveiled a third-quarter net loss of USD137m (EUR99.1m), burdened by the poor performance of the sugar unit. The latter reported a loss of USD19m as a result of poor weather conditions and low global sugar prices.

CEO Soren Schroder told Reuters that his company had not yet held talks with potential suitors for the unit. According to him, the replacement value of the sugar milling business is over USD3bn. Schroder did not specify how long the review would continue.

JPMorgan Chase & Co (NYSE:JPM) analyst Ann Duignan commented that she was "encouraged" by Bunge's decision to study strategic option for its sugar arm. However, other analysts think that the company could find it hard to find a buyer because of the market uncertainty.
Details
Date Published: 25/10/2013
Target: Bunge´s sugar milling operations
Country: Brazil
Sector: Food/Beverages/Tobacco, Agriculture/Forestry
Type: Divestment
Status: Auction
Vendor: Bunge Ltd
Buyer: Unnamed buyer
Comment:
The replacement value of the target is over USD3bn.

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