The announcement by Glencore that it is selling 40% of its agriculture business to Canada Pension Plan Investment Board for $2.5-billion cash has received the nod from analysts.

Glencore said the proceeds from the transaction would be used to reduce net debt.

Canada Pension Plan Investment Board buys long-term low-risk investments to fund the retirement of 18-million Canadians.

Bank of America Merrill Lynch research analysts headlined the deal as being better than expected, UBS analysts spoke of it realising value, JP Morgan Cazenove analysts described it as being more credible than recent mining sales and credit agency Moody’s declared it credit positive.

“We think the market should take the transaction positively,” said Bank of America Merrill Lynch in a note.

UBS described the valuation the London-, Hong Kong- and Johannesburg-listed diversified mining and marketing company had achieved for a minority of its agriculture business as being ahead of recent agriculture transactions.

“Also the type of buyer – a long-term pension investor – highlights the more stable ‘utility type’ earnings stream from the agribusiness versus more volatile earnings for the metals and energy divisions of Glencore’s marketing business and traditional mining assets,” UBS added.

JP Morgan Cazenove said the disposal reinforced its view that Glencore’s deleveraging strategy was more credible and simpler to execute than Anglo American’s debt reduction strategy.

Anglo last week announced plans to sell its 70% interest in the Foxleigh metallurgical coal mine, in Australia, to a consortium led by Taurus Fund Management.

JP Morgan said it expected the Glencore share to rerate in the next 6 to 12 months.

Moody’s VP communications strategist Abi Jones described the proposed equity sale as being in line with Glencore’s aim to deliver $4-billion to $5-billion in divestment proceeds, reduce debt and keep its current Baa3 ratings.

“Bringing a strong financial co-investor into its agriculture business should also bolster its long-term ability to grow,” Moody’s added.

The Wall Street Journal reported a rise in Glencore’s euro-denominated bonds and stated that its 2017, 2018 and 2020-maturing benchmark-size bonds were all breaking through intraday highs.

Glencore CEO Ivan Glasenberg described the Canada Pension Plan Investment Board as having a proven track record.

“We welcome them aboard and look forward to continuing our good relationship as we work together,” Glasenberg added.

The Fortune publication headlined Glencore’s sale plan as the latest step of the company to cut debt as well as soothe investor concerns about weak commodity prices.

“Glencore Agri complements our existing portfolio of agriculture assets, bringing global exposure, scale and diversification,” Canada Pension Plan Investment Board private investment head Mark Jenkins said.

The parties have agreed to a four-year lock-up period, but with Glencore being able to sell a further 20% within that period.

The transaction is subject to customary regulatory approvals and closing conditions and is expected to close during the second half of 2016.

A differentiated and vertically- integrated business focused on the global agriculture products value chain, Glencore Agri is built around a network of origination and logistics assets.

It has more than 200 storage facilities, 31 processing facilities and 23 ports in strategic locations and trades in grains, oilseeds, rice, sugar, pulses and cotton.

In the year to end December, Glencore Agri reported earnings before interest and tax of $524-million.

If the deal goes through, Canada Pension Plan Investment Board will have the right to appoint two directors to the board of Glencore Agri, alongside two Glencore-appointed directors and CEO Chris Mahoney.

At shareholder meetings, Glencore and Canada Pension Plan Investment Board representatives will vote in proportion to their shareholdings.

Barclays, Citi and Credit Suisse acted as joint financial advisers to Glencore, with Linklaters LLP providing the legal advice.