November 10, 2008 11:01 AM
- Text
Corn Products International, Bunge Cancel Merger Deal
(MoneyWatch) Bunge on Monday pulled out of its planned deal to buy Corn Products International a few days after Corn Products' board withdrew support for the merger.
When the deal was struck in June, it appeared that big grain processors like Archer Daniels Midland and Cargill would have a new peer. Monday's news keeps the status quo pretty much intact.
The value of the all-stock deal had plummeted from about $4.2 billion to about $1.8 billion as Bunge's shares have fallen by about 60 percent. Corn Product's shares, tied to Bunge's, also fell by about half.
During the deal's short life, grain prices have fallen by about half from record highs.
Just a couple of weeks ago, Bunge expressed confidence that the deal would go through. At the same time, it announced that its profits had fallen by 33 percent. Corn Products' profits, meanwhile, have continued to rise.
Corn Products will pay Bunge a $10 million cancellation fee.
When the deal was struck in June, it appeared that big grain processors like Archer Daniels Midland and Cargill would have a new peer. Monday's news keeps the status quo pretty much intact. The value of the all-stock deal had plummeted from about $4.2 billion to about $1.8 billion as Bunge's shares have fallen by about 60 percent. Corn Product's shares, tied to Bunge's, also fell by about half.
During the deal's short life, grain prices have fallen by about half from record highs.
Just a couple of weeks ago, Bunge expressed confidence that the deal would go through. At the same time, it announced that its profits had fallen by 33 percent. Corn Products' profits, meanwhile, have continued to rise.
Corn Products will pay Bunge a $10 million cancellation fee.
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