Glencore Unit Bids Said Led by Canada Pension Plan, Saudi Firm

  • Glencore may sell stakes in ag unit to multiple bidders
  • Citigroup has valued the entire unit at about $10.5 billion

Canada Pension Plan Investment Board and state-owned Saudi Agricultural and Livestock Investment Co. are among lead bidders for a minority stake in Glencore Plc’s agriculture unit, according to people with knowledge of the matter.

The companies are presenting final bids for the unit this month, the people said, asking not to be identified as the information is private. Glencore is open to selling stakes to more than one party, the people said. No final agreements have been reached, they said. Citigroup Inc. has valued the entire unit at about $10.5 billion.

The sale is part of a companywide debt-cutting program that Glencore Chief Executive Officer Ivan Glasenbergannounced in September. The company has said it’s seeking to complete the sale in the first half of this year. The Swiss mining and natural resources firm’s shares have gained more than 60 percent this year, recovering from investor concerns about a rout in commodity prices and its ability to pay down a $30 billion debt load.

Glencore has already scrapped the dividend, closed mines and sold $2.5 billion of shares. After reporting a 69 percent slump in profit this week, the company pledged to bring its net debt as low as $17 billion, $1 billion less than previously stated, and to raise as much as $5 billion from selling assets. It reported net debt of $25.9 billion as of Dec. 31.

Glencore became a major agriculture player when it agreed to buy Canadian grain handler Viterra Inc. for C$6.1 billion ($4.5 billion) in 2012.

Spokesmen for CPPIB and Glencore declined to comment. A representative for Saudi Agricultural didn’t immediately respond to a request for comment outside of normal business hours.

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