According to multiple reports, global commodities business Glencore is nearing a deal to sell a 40% stake in its agricultural business to the Canada Pension Plan Investment Board, one of the key players in the ongoing acquisition of Asciano by a number of financial and logistics players.
Glencore has been looking to sell off several significant stakes in its diverse portfolio, as it aims to improve its balance sheet by cutting into its significant debt figure.
CPPIB, the investment arm of Canadian Pension Plan – the country’s largest pension fund – is set to acquire a 40% stake in the trader’s agricultural business for a reported figure of US$2.4bn.
The reported figure values the agricultural unit at a total of US$6bn, despite Citigroup estimating the unit was worth US$10bn in September.
A Bloomberg report on Wednesday suggested an announcement would be made regarding the transaction within days.
Glencore’s key agricultural operations are in the European Union, Russia, Canada and Australia.
The company’s major Australian agricultural interest includes more than 30,000 hectares of cropping land across south-eastern Australia, and storage and handling facilities across the region, and elsewhere in Australia.
CPPIB will be a familiar name to regular ABHR readers; the fund is a key player in the break-up and sale of Asciano, which is currently under review at the Australian Competition and Consumer Commission.
Through the deal, CPPIB plans to acquire a 33% interest in Pacific National – Asciano’s significant rail business. It also plans to buy 9.99% of Qube, which is acquiring 50% of Asciano’s Port Terminals business, Patrick, in the deal.
CPPIB invests almost 300 billion Canadian dollars for its members. It has a 25% stake in the Westlink M7 toll road in Western Sydney, and is also invested in the NorthConnex tolled tunnel project in the city’s north-west.