Bunge to Buy Viterra in $8.2 Billion Bet on North American Crops
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U.S. grain trader and oilseed processor Bunge agreed to acquire Glencore-backed Viterra in an $8.2 billion deal that aims to expand the company's reach in North American crops. Bunge plans to combine its strength in soybean processing and South American crops with Viterra's network of North American grain-buying and shipping facilities. Executives said the deal, expected to close in mid-2024, will create a bigger player better equipped to weather supply-chain disruptions and agriculture's boom-and-bust cycles. "It gets us where we wanted to go faster, better, and with less risk," said Greg Heckman, Bunge's CEO, who will continue to lead the combined company. "Over the past few years, we've seen how important a globally balanced footprint can be." Bunge and Viterra are important partners to farmers around the world, buying crops and selling them to food companies, governments and other buyers around the world. The companies own a range of processing plants that turn oilseeds and grain into vegetable oil, fuel, livestock feed and other products.
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The Swiss stock market ended modestly higher on Tuesday, shrugging off a setback it suffered around mid afternoon. Firm European markets amid a slew of encouraging economic data, including a report on U.S. consumer price inflation, helped underpin sentiment. The benchmark SMI ended with a gain of 26.02 points or 0.23% at 11,327.27. The index, which climbed to 11,348.15 in early trades, touched a low of 11,275.51 around mid afternoon. Kuehne & Nagel rallied nearly 5%. Partners Group surged more than 2.5%, Richemont climbed 2% and Sika gained 1.78%. ABB advanced 1.35%. Logitech, Holcim, Alcon, Lonza Group and Givaudan ended higher by 0.55 to 1%. Novartis ended nearly 1% down. Nestle shed about 0.5%, while Zurich Insurance Group, Sonova and Swiss Life Holding declined marginally. In the Mid Price Index, DocMorris soared nearly 25%. VAT Group ended stronger by 3.77%. Lindt & Spruengli and Georg Fischer gained 2.1% and 2%, respectively. SGS, Flughafen Zurich, Helvetia, Straumann Holding, AMS, Clariant and Adecco also ended higher. Tecan Group, Meyer Burger Tech and Bachem Holding ended lower by 2.4 to 3%. Swiss Prime Site, Temenos Group and SIG Combibloc also ended notably lower.
European stocks shrugged off a mid-session setback and closed higher on Tuesday thanks to strong economic data from Germany and a surprise rate cut decision by the People's Bank of China. Data from Destatis showed German consumer price inflation climbed 6.1% annually in May, slower than the 7.2% rise in April. That was in line with the flash data published on May 31. Further, this was the weakest inflation since March 2022, when prices had risen 5.9%. Similarly, EU-harmonized inflation slowed to 6.3% from 7.6% in April, as estimated. The German ZEW headline number showed that the economic sentiment index unexpectedly improved to -8.5 from -10.7 seen in May. Analysts had expected a score of -13.0. The pan European Stoxx 600 climbed 0.55%. The U.K.'s FTSE 100 gained 0.32%, Germany's DAX ended 0.83% up, and France's CAC 40 moved up 0.56%, while Switzerland's SMI advanced 0.23%. Among other markets in Europe, Austria, Belgium, Finland, Greece, Ireland, Netherlands, Norway, Portugal, Russia and Sweden ended higher. Iceland, Poland, Spain and Turkiye closed weak, while Czech Republic and Denmark ended flat. In the UK market, Glencore rallied 5.3% and Antofagasta surged about 3.5%. Anglo American Plc, Rio Tinto, Flutter Entertainment and Weir Group gained 2.2 to 2.75%. Entain, Fresnillo, Smiths Group, Endeavour Mining, IAG, Frasers Group, Johnson Matthey, Bunzl, Spirax-Sarco Engineering, Natwest Group and Intertek Group also posted strong gains. Admiral Group ended more than 5% down. Persimmon drifted down 4.4%, while Segro, Taylor Wimpey, Barratt Developments, Unite Group, British Land Company and BT Group lost 2 to 3.7%. In the German market, Covestro surged 2.8%. Zalando, Adidas, Siemens, Deutsche Post, Commerzbank, Daimler Truck Holding, BMW, Infineon, Puma, SAP, Continental, Deutsche Boerse, Mercedes-Benz, Volkswagen and BASF gained 1 to 2.8%.
Stock markets on Tuesday passed their first major test this week, edging higher after federal data showed the U.S. inflation rate has slowed by half since last year's highs. The S&P 500 ticked up 0.7%, notching a new 2023 high, while the tech-heavy Nasdaq Composite climbed by 0.8%. The Dow Jones Industrial Average rose 0.4%, or about 146 points. Major indexes' gains spanned almost every sector of the U.S. economy save the utility industry, with the industrial and materials-producing sectors leading the way. In a potential sign that this year's market rally is broadening beyond tech behemoths, the Russell 2000 index of small-cap stocks also logged gains. Among individual stocks, Tesla shares rose 3.6% to extend their winning streak to a record 13th consecutive day. Many options traders are looking to play the rally, sending call options activity to one of the highest levels of the year in recent sessions, Cboe Global Markets data show. The big tech stocks that have propelled much of the broader market's rally this year largely continued their climb. Alphabet shares eked out a 0.2% increase after The Wall Street Journal reported that European Union regulators might pursue a breakup of Google's advertising-technology business as part of an antitrust complaint. Nvidia, meanwhile, continued a run that has been fueled by optimism about artificial intelligence. Shares advanced some 3.9% to help the chip maker close the session with a market cap above $1 trillion for the first time.
The stock markets in East Asia and Australia are mixed on Wednesday. On the Chinese stock exchanges, however, investors are keeping a low profile in view of the US Federal Reserve's interest rate decision. In Hong Kong, the Hang Seng Index is trading 0.1 per cent lower after posting moderate gains in early trading. On the Chinese mainland, the Shanghai Composite is up 0.2 per cent.
On Tuesday, 2-year U.S. Treasury yields ticked upward to 4.694%, while those for 10-year Treasurys rose to 3.838%.
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