Canadian Manufacturing

CPPIB buys US$2.5B stake in Glencore agricultural unit

Pension board gains a 40 per cent stake in commodity giant's agri-business as part of "long-term partnership"


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A Glencore-owned grain export terminal in Australia. PHOTO: Glencore

A Glencore-owned grain export terminal in Australia. The CPPIB said the 40 per cent stake in the company’s agricultural business is an “excellent fit”. PHOTO: Glencore

TORONTO—The Canada Pension Plan Investment Board says it has agreed to spend US$2.5 billion to purchase a 40 per cent stake in Glencore Agricultural Products, a division of Swiss-based commodities giant Glencore plc.

The purchase is subject to customary regulatory approvals and is expected to close in the second half of 2016.

Glencore Agri is a global enterprise primarily focused on grains, oilseeds products, rice, sugar, pulses and cotton.

It has agriculture assets and operations in Canada, Australia, South America and Europe.

The operation has more than 12,000 people in more than 30 countries.

Mark Jenkins, the global head of private investments at the pension board, says agriculture is an “excellent fit for a long-term investor like CPPIB.”

“We are excited about the opportunity to acquire a significant stake in Glencore Agri, a leading agricultural business … we see this as a compelling opportunity that aligns with CPPIB’s long-term investment horizon,” he said.

“This is an important day in the evolution of Glencore Agri, and we look forward to working with CPPIB to continue to build the Glencore Agri business over the long term,” said the unit’s CEO Chris Mahoney.

The Canada Pension Plan Investment Board invests funds not needed by the Canada Pension Plan to pay current benefits.

As of Dec. 31, 2015, the CPP Fund totalled $282.6 billion.


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