The logo of Glencore is pictured in front of the company's headquarters in the Swiss town of Baar, Nov. 13, 2012. Reuters/Michael Buholzer

Canada Pension Plan Investment Board (CPPIB) — the country’s largest pension fund — announced Wednesday that it will purchase a 40 percent stake in Glencore’s agricultural unit. The deal, finalized as part of the Anglo-Swiss mining and commodity giant’s move to reduce its debt burden, is valued at $2.5 billion, payable in cash.

The transaction, which values the company’s agricultural business at $6.25 billion, is subject to regulatory approvals and is expected to close during the second half of 2016, Glencore said in a statement released Wednesday. The agricultural unit is involved in trade of commodities such as grains, oilseeds products, rice, sugar, pulses and cotton, has long-term debts of $600 million, and working capital of $3 billion.

“As an asset class, agriculture is an excellent fit for a long-term investor like CPPIB, and we are excited about the opportunity to acquire a significant stake in Glencore Agri, a leading agricultural business,” Mark Jenkins, senior managing director and global head of private investments at CPPIB, said in a statement.

Glencore also retains the option to sell another 20 percent stake in its agricultural business to CPPIB. Additionally, both Glencore and CPPIB can call for an initial public offering eight years after the deal closes.

Glencore, which increased its exposure to food grains in 2012 with the acquisition of Canadian grain handler Viterra, has been reeling under massive losses triggered by the recent slowdown in China and an ensuing rout in commodity prices.

In 2015, for instance, the company reported a net loss of nearly $5 billion, compared with a net profit of $2.3 billion in 2014, while its shares in London dropped nearly 70 percent, making it one of the worst performers among its peers.

In March, Glencore pledged to pare its net debt from nearly $26 billion at the end of last year to $17 billion by the end of 2016, primarily through asset sales and issuing new shares.

During early trade Wednesday, Glencore’s shares were trading down 0.4 percent. So far this year, the company’s shares have risen over 55 percent, significantly outperforming the FTSE 100, which has dropped 2.1 percent.