GlencorePlc will sell a 40% stake in its agriculture business to CanadaPension Plan Investment Board, or CPPIB, for a total of US$2.5 billion in cash,it said April 6.
The company entered a definitive agreement with a whollyowned subsidiary of CPPIB to sell the minority stake in Glencore AgriculturalProducts.
The companies have also agreed to an option allowingGlencore to sell a further 20% stake. Glencore and CPPIB can call for aninitial public offering of Glencore Agri after eight years from closing.
Glencore intends to use the sale proceeds to reduce netindebtedness, as part of its previously announced plan to its net debt to close to US$20billion by the end of 2016.
The transaction, which is expected to close during thesecond half of the year, values 100% of the equity in Glencore Agri at US$6.25billion.
Upon closing, Glencore Agri will be governed by its ownboard of directors. CPPIB will have the right to appoint two directorsalongside two Glencore-appointed directors and the CEO Chris Mahoney.