Spruce Point Capital Management is short shares of Bunge Global SA (NYSE:BG).
After conducting a forensic review of Bunge Global SA (NYSE:BG) (“Bunge” or the “Company”), an S&P 500 component and global agribusiness, Spruce Point calls for an independent investigation into the accuracy of its financial reporting and accounting. In our opinion, Bunge is a complex and troubled roll-up that has demonstrated an inability to deliver value to shareholders absent external financing. We provide evidence that since 1999, the Company has generated a cash flow deficit of -$1.6bn after capital expenditures, business investment, and asset-shuffling and repositioning, while making +$4.7bn and +$3.9bn of dividends and share repurchases effectively through debt-financing.
Our belief is that Bunge is under core pressure in oilseeds, once its highest EBIT contributor and which it once claimed was a global leading business and difficult to replicate. Bunge also says nothing about the growing impact of GLP-1 weight loss drugs in its SEC filings or conference calls, but with customers in the food products industry, we believe it is likely feeling the effects. Based on our evaluation, we estimate 55% – 80% potential downside and material market underperformance risk.
The report highlights several key concerns with the Company, including:
- In our opinion, Bunge is a complex and troubled roll-up facing growing core challenges that has demonstrated an inability to deliver value to shareholders absent external financing.
- Given mounting financial pressures, we view Bunge’s $10.6bn Viterra acquisition from Glencore (LSE: GLEN) announced in June 2023 as a deal borne out of necessity to deflect from its core challenges and a transaction, and we believe that it has wildly disappointed.
- Bunge claims to be committed to transparency so we believe the Board should investigate the following matters and provide more clarity around its financial reporting.
- Bunge’s share price is a poor risk / reward, new 2030 EPS guidance should be discounted, and extreme insider selling of up to 30% of the stock may be on the near-term horizon.
Executive Summary
We Are Short Bunge Global SA (NYSE: BG) And See Approximately 55% – 80% Potential Downside Risk
After conducting a forensic financial review of Bunge Global SA (NYSE: BG or “the Company”), an S&P 500 component and global agribusiness, Spruce Point calls for an independent investigation into the accuracy of its financial reporting and accounting. In our opinion, Bunge is a complex and troubled roll-up that has demonstrated an inability to deliver value to shareholders absent external financing. We provide evidence that since 1999, the Company has generated a cash flow deficit of -$1.6bn after capital expenditures, business investment, and asset-shuffling and repositioning, while making +$4.7bn and +$3.9bn of dividends and share repurchases effectively through debt-financing.
Our belief is that Bunge is under core pressure in oilseeds, once its highest EBIT contributor and which it once claimed was a global leading business and difficult to replicate. The new 10-K added a sentence under competition risk that states: “Over the past few years, certain of our competitors have added oilseed processing and refining capacity in response to growing demand.” This admission indicates to us that Bunge is finally telegraphing growing pressures. Bunge competes against heavyweights such as Cargill, Archer Daniels Midland (“ADM”), Louis Dreyfus, Wilmar International, and China Oil and Foodstuffs Corp (“COFCO”). We believe COFCO is a particular pressure point for Bunge as it is effectively a Chinese stateowned corporation with deep access to capital and has made aggressive expansionary inroads into South America through large infrastructure investments. Bunge is heavily exposed to Latin America with more than 25% of its long-lived assets there. We also believe it is feeling pressure in China and in its animal feed business given changing policies and excess capacity.
Bunge also says nothing about the growing impact of GLP-1 weight loss drugs in its SEC filings or conference calls, but with customers in the food products industry, we believe it is likely feeling the effects in areas such as oilseed products, wheats, corns, and barleys which are core to snacks, packaged goods, condiments and alcohols such as beer and whiskies. Food trends are also moving towards fibers where Bunge recently retracted claims about a proprietary fiber process for customers. Bunge says customers depend on it to “develop tailored, innovative solutions that address consumer needs”. Yet, Bunge shifted its R&D tone dramatically in the new 10-K calling it “very minimal”. Bunge’s R&D spending and margin pales in comparison to peers and has contracted by -10.6% over the past three years. Bunge also started a venture arm that invested in Beyond Meat and Benson Hill while expanding capacity in plant-based proteins. Both companies have largely failed.
Given mounting financial pressures, we view Bunge’s $10.6bn Viterra acquisition from Glencore (LSE: GLEN) announced in June 2023 as a deal borne out of necessity to deflect from its core challenges which it now says “mitigates risk because it adds more balance to our oilseed processing footprint” and provides “Enhanced ability to meet the demands of increasingly complex markets”. We interpret such carefully worded language as resoundingly bearish and defensive.
Based on our forensic analysis, we believe Viterra has wildly underperformed expectations and that Bunge’s core revenue growth last year of ~4% underperformed industry growth of ~6.3%. We see the possibility that Bunge was bamboozled by Glencore, which is a sophisticated and controversial counterparty that owned Viterra since 2012, and who pled guilty to bribery and market manipulation charges with the U.S. Dept. of Justice in 2022 for $1.1bn.
We are troubled by numerous aspects of the Viterra deal which closed on July 2, 2025 including:
- Viterra reported a financial restatement in 2021 for essentially booking financing transactions as revenue.
- Bunge says nothing about being reunited with Gavilon, which Viterra purchased in 2022 for $2.9bn. This is surprising given that Bunge’s CEO, CFO and Chief Risk Officer were previously top executives at Gavilon.
- Bunge’s proxy statement makes a startling admission that Viterra, a business with ~$40bn of revenue, either had no long-range planning or projections or did not want to provide them in writing to Bunge’s management as part of the due diligence process. Bunge also qualified its projections claiming it does not provide detailed long-term public forecasts despite issuing 4-year EPS guidance the year prior. Bunge failed to provide revenue projections for Viterra in its proxy statement which it likely formulated because it was able to provide Adj. EBIT, EBITDA and Unlevered Free Cash Flow estimates.
- Bunge’s 2025E Adj. EBITDA forecasts contained in the proxy statement allow us to evaluate management’s execution and understanding of its business. The projections were standalone, so we combine and then adjust the estimates for the disclosed deal costs and synergies achieved. By our estimate, Bunge’s 2025 Adj. EBITDA fell -24% below plan.
- Bunge has not been transparent with Viterra’s quantitative contribution by segment. There is one potential reason for this fact pattern: the results have been terrible and underwhelming. Piecing together clues from various disclosures made in the pro forma financials and footnotes of the 10-K & 10-Q, we estimate Viterra’s revenue fell -16.7% in 2025 which is worse than ADM’s -6.2% revenue decline. ADM suffered a recent financial restatement and settled with the SEC for accounting fraud.
- There is additional evidence that Viterra brought unplanned financial strain to Bunge post closing. Bunge increased its committed revolving credit facilities by $1.0 billion (+11%) and disclosed that it had tapped the revolver for $600m at year end. In our experience, tapping the revolver only occurs in situations where it is absolutely necessary and when alternative liquidity is strained.
- Post closing, Bunge has revised Viterra’s property, plant and equipment (“PP&E”) valuation twice by -$596m (-10%). A revision lower could indicate that Viterra was overstating its PP&E or that the assets were obsolete or less useful than assumed. The practical implication is that subsequent depreciation falls and earnings rise because goodwill is not depreciated. Moreover, if Viterra’s assets were inflated, there is a strong possibility its historical earnings were also inflated. Bunge’s EPS projections may have benefited by up to $0.44 per share by lowering its depreciation expense.
Bunge recently said, “We’ve always been committed to transparency and candor, and we’re taking steps to align fully with those values.” We think investors should challenge this statement considering recent segment realignments and reporting post the closing of Viterra and a corporate redomicile from Bermuda to Switzerland in 2023. Beyond the transparency issue, Bunge also tries promoting aggressive Non- GAAP financial results which we believe are a stretch even by industry norms.
Below are areas of considerable concern we’ve identified with Bunge’s financial reporting:
- Revenue: Bunge’s new geographic reporting dramatically reduces details about external revenues. Investors can no longer ascertain how much revenue comes from Argentina or Brazil which are two notoriously volatile and difficult places to do business. This is problematic because Bunge has struggled for at least a decade in Argentina but claims that Viterra will improve operations. Instead, investors see revenue from Switzerland and the Netherlands which are notoriously secretive tax havens.
- Operating Cash flow and Capex: Bunge terms its cash flow as Funds From Operations (“FFO”) which is characteristic of a REIT despite it not being one and projects ample 2025 discretionary cash flow of $1,248m. However, we believe Bunge has an overly liberal interpretation. Based on our more conservative estimate, we believe discretionary cash flow is -$993m and not covering the annual dividend burden. Bunge bifurcates sustaining and growth capex to claim it has high “discretionary” cash flow. However, we believe the capex distinction is hand-waving because growth capex is necessary and critical to maintain its competitiveness.
- Cash Liquidity: Spruce Point believes it is customary for large and global U.S. public companies to disclose how much cash and equivalents are held outside of the U.S. in foreign subsidiaries or permanently invested abroad. In fact, Bunge’s agribusiness peers provide these essential disclosures. On the other hand, Bunge fails to provide this crucial information and does not even estimate the tax effect if it were to repatriate foreign earnings. In Q3’25 Bunge reported cash, equivalents, and marketable and other short-term investments of $3.1bn but in Q4’25 Bunge increased its committed revolving credit facilities by $1.0bn (+11%) and disclosed that it had tapped the revolver for $600m at year end 2025.
- Financial Leverage: Bunge tells investors its Net Debt / LTM Adj. EBITDA is 1.9x but we believe this is an overly permissive interpretation. In fact, when capital leases, postretirement liabilities, lingering tax assessments and penalties in Brazil, financial guarantees, LOCs, and surety bonds are considered, Net Debt balloons from $12bn to $19.4bn. Bunge also generously gives itself 70% credit for readily marketable inventories (“RMI”) to lower its Net Debt further. However, we think this is too generous given ADM applies a 40% factor. Our estimate also generously increases Bunge’s 2025 Adj. EBITDA for deal and integration costs, and Viterra’s H2’25 contribution despite performance being notably weak. Overall, we believe Bunge’s leverage is closer to 5.7x.
Our concerns with Bunge’s financial reporting are not unfounded. We observe that Bunge’s audit fees in relation to its revenue and employees are much higher than ADM’s. ADM recently restated financial results and was charged with accounting fraud by the SEC. We find at least one example in Spain where Bunge received a “Qualified” audit opinion and where it suspiciously modified the terms of a recent transaction with Repsol that reduced upfront cash and deferred payments to the Company.
Bunge’s March Investor Day goals should be heavily discounted given management’s recent failures:
In 2022, Bunge provided a mid-cycle update and outlined its growth framework for base EPS to be ~$11 per share by 2026. Now in 2026, having spent $10.6bn to acquire Viterra and assume $34bn of revenue along with acquiring IFF’s soy protein concentrate, lecithin, and soy crush businesses ($240m of revenue), Bunge guided 2026 EPS to be $7.50 – $8.00 per share or ~30% below the previous target. Even more concerning, Bunge would not put in writing the factors expected to impact its business segments in 2026. However, hope springs eternal and now Bunge is outlining a $15+ per share mid-cycle EPS target by 2030 even with Viterra not providing long-term projections according to the proxy statement. There are many steps in the EPS bridge that Bunge must execute perfectly to achieve this target. Notably, over $1.50 per share is tied to Viterra cost, network, and commercial synergies but our analysis indicates they are considerably lower and large agribusiness acquisition synergies often fail to materialize. Employee retention is critically important, and we cannot reconcile over 3,000 employees that have seemingly vanished six months post-closing despite Bunge’s claim that headcount reduction was not a critical aspect of the transaction.
The March Investor Day promotional event was well-timed with extreme insider selling potential on the near-term horizon:
Bunge insiders have increasingly little equity at risk and have diluted their ownership from 3.7% to 0.6% since March 2020. Meanwhile, Glencore and Canada Pension Plan (“CPP”) who were Viterra’s largest shareholders can start selling 59m or 30% of Bunge’s shares on July 3, 2026. Analysts are already pressing Glencore how it will “get rid” of Bunge stock. British Columbia Investment Management received 6.5m Bunge shares in the transaction but, according to SEC filings, has already liquidated.
We see a poor risk / reward in owning Bunge’s shares at the current level:
Analysts take Bunge’s bait and believe in its ability to execute on its 2030 goals despite previous failures and our mounting evidence that suggests Viterra is an injured business while Bunge’s core business also struggles. Sell-side consensus target is $132.25 per share (6.6% upside) and we believe most of the upside from commodity price increases from war disruption and optimism over biodiesel is already priced in. We see little rationale for Bunge’s multiple expansion to a 3-year high from Viterra’s business which is lower margin, with more volatile and/or impaired results. Given Bunge’s immense debt-load, its equity value is highly sensitive to changes in perception of its valuation multiple. Prior the Viterra deal, Bunge’s EV / Revenue multiple averaged 0.35x and compressed to a low 0.25x in the preceding six years. We believe that growing competition, negative food consumption trends, and challenges faced by Viterra do not merit its recent multiple expansion. We see approximately 55% – 80% downside risk ($24.50 to $55.85) per share to BG’s share price and expect it to underperform the agribusiness industry and equity market.
Read the full report here by Spruce Point Capital Management
