Bunge entered into an agreement with Glencore-backed Viterra for a merger to create an agricultural trading giant worth about $34 billion including debt. The combination is in line with company’s purpose to connect farmers to consumers to deliver essential food, feed and fuel.

Bunge announced it has entered into a definitive agreement with Viterra together with certain affiliates of Glencore PLC, Canada Pension Plan Investment Board and British Columbia Investment Management Corporation, to merge with Viterra in a stock and cash transaction.

For the companies, the merger of Bunge and Viterra will “create an innovative global agribusiness company well positioned to meet the demands of increasingly complex markets and better serve farmers and end-customers.” On the other hand, it has the potential to further increase the existing monopolization in the world food sector. The deal brings the combined company closer in global scale to leading rivals Archer-Daniels-Midland (ADM) and Cargill, valuing Bunge and Viterra at about $17 billion each. Bunge shareholders, however, will own about 70% of the company, because Bunge will pay for a significant chunk of the deal with cash.

With an enhanced global network, the combined company’s increased diversification across geographies, seasonal cycles and crops will increase optionality in managing risk and increase resiliency. Together, the highly complementary organizations will benefit from more diversified capabilities, greater operational flexibility across oilseed and grain supply chains and processing, greater resources and combined employee talent to innovate and deliver for customers in every environment, creating value for all stakeholders.