North American Mosaic Fertilizers announced this Monday (19.12) the purchase of Vale Fertilizers, in a transaction with an aggregate value of US$ 2.5 billion. With the deal, Mosaic becomes the leading company in the production and distribution of fertilizers in Brazil.
“This acquisition will bring Mosaic a great opportunity to benefit from the rapidly growing Brazilian agricultural market and improve its business conditions. We see this as an ideal strategic fit for Mosaic. We have proven experience in phosphate mining and production, a strong track record of successful acquisition integrations, as well as extensive relationships and experience in Brazil,” says President and CEO Joc O'Rourke.
Vale Fertilizers has a production capacity of 4.8 million tons of phosphates and 500,000 tons of potash. It has five Brazilian phosphate mines, four chemical and fertilizer production plants and a potash unit in Brazil. The eight thousand employees will be integrated into Mosaic's workforce, which will reach 17 thousand in total.
The transaction also includes Vale Fertilizers' 40% stake in the Miski Mayo phosphate mine (Peru) and the potash project in Saskatchewan (Canada), excluding the nitrogen and non-phosphate unit located in Cubatão (SP). The potash venture in Rio Colorado, Argentina, will be analyzed until the deal is concluded, scheduled for 2017.
“Mosaic has agreed to acquire complementary, high-quality assets in a powerful agricultural hub with significant cost advantages and an attractive valuation. We expect this transaction to be accretive to earnings and also generate positive cash flow, and we will continue our focus on maintaining a strong investment grade credit rating,” said Rich Mack, Executive Vice President and CFO of Mosaic.
“As commodity and crop nutrition markets improve, Mosaic will have significant ability to outperform the competition and generate value for shareholders. Vale will be a valued minority partner and will bring significant Brazilian expertise, which we believe will benefit Mosaic in the coming years”, adds Mack.
