Make us your home page
Instagram

Mosaic to buy fertilizer arm of Brazilian mining giant Vale

Mosaic, which has major operations in Florida, will buy the fertilizer arm of the Brazilian mining giant Vale in a deal worth $2.5 billion. SKIP O’ROURKE  |   Times  

Mosaic, which has major operations in Florida, will buy the fertilizer arm of the Brazilian mining giant Vale in a deal worth $2.5 billion. SKIP O’ROURKE | Times

RIO DE JANEIRO — The Brazilian mining giant Vale has reached an agreement to sell much of its fertilizer assets to the Mosaic Co. of the United States in a deal worth $2.5 billion, the companies said Monday.

The deal will help Vale reduce its debt, a major problem plaguing many Brazilian companies struggling with a prolonged recession and a weaker local currency. Earlier this year, Vale's chief executive, Murilo Ferreira, said he wanted to reduce the company's debt by $10 billion.

At the same time, it gives Vale an important minority stake in Mosaic and the growing global fertilizer business.

For Mosaic, which is based in Plymouth, Minn. and has major phosphate mining operations in Florida, the acquisition gives it a foothold in Latin America's largest economy, which boasts a strong agriculture sector.

Mosaic's chief executive, James C. O'Rourke, said in a conference call Monday that he was drawn to the deal in part because "Brazil's farm economy has grown at remarkable rates over the past two decades and that growth continues today."

That is even though the country continues to face political and economic upheaval.

As part of the deal, Mosaic will acquire Vale's phosphate assets in Brazil, excluding those in Cubatão; its potash assets in Brazil; the Kronau potash project in Canada; and its shareholding position in Bayóvar, Peru. A Rio Colorado potash project will also be included after due diligence, the companies said.

The transaction is a combination of stock and cash. Half of the $2.5 billion will be in cash, while Mosaic will issue roughly 42.3 million shares of common stock.

The purchase price represents a multiple of 5.4 times the assets' adjusted earnings before interest, taxes, depreciation and amortization for 2015, O'Rourke said.

"We have always said that we look for value-adding opportunities at the low points in the cycle, and that is what we have found here," O'Rourke said.

Vale stands to earn an additional $260 million if certain objectives are met over the two years after the close of the deal. The company will also gain the right to appoint two members to Mosaic's board of directors, one of whom is to be independent.

The companies expect the deal, which requires approval from CADE, Brazil's antitrust regulator, to be completed in late 2017.

Mosaic to buy fertilizer arm of Brazilian mining giant Vale 12/19/16 [Last modified: Monday, December 19, 2016 5:36pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, New York Times.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. What ever happened to the Zika epidemic?

    Health

    Remember Zika?

    The last time Gov. Rick Scott warned Floridians about the potential threat of the mosquito-borne virus was in July, when he urged residents to still be vigilant against bug bites and standing water. At the time, doctors and researchers were bracing for what was supposed to be another active summer …

    Aedes aegypti mosquitoes, responsible for transmitting Zika, sit in a petri dish at the Fiocruz Institute in Recife, Brazil. Cases of the virus are down dramatically this year in Florida, the result of awareness efforts, experts say. But the public, they add, should not let its guard down. [Associated Press]
  2. Pinellas licensing board needs cash. Will the county give it any?

    Local Government

    LARGO –– The grand jury that said Pinellas County should not take over the troubled construction licensing board also said the county should bail out the agency before it goes broke in 2018.

    Pinellas County Commission chair Janet Long isn't keen on the idea of the county loaning money to keep the Pinellas County Construction Licensing Board afloat. The county has no say over the independent agency, which could run out of funding in 2018. [SCOTT KEELER   |   Times]
  3. Is the Bundt cake back? How retro baked goods are becoming trendy again

    Cooking

    Once there were grunts and slumps, buckles and brown betties. Oh, and pandowdies and sonkers. In the olden days, people routinely made angel food cakes, tomato soup cakes and hummingbird cakes. These were not Duncan Hines mixes, but rather confections made from scratch following yellowed and stained recipes in your …

    Nothing Bundt Cakes in Tampa offers a variety of options, from tiny “bundtinis” and 10-inch cakes that serve 18 to 20 people. Core flavors include lemon, marble, red velvet and chocolate-chocolate chip, with featured flavors like confetti.
  4. Pinellas construction licensing board needs to be fixed. But how?

    Local Government

    LARGO –– Everyone agrees that the Pinellas County Construction Licensing Board needs to be reformed. But no one agrees on how to do it.

    Rodney Fischer, former executive director of the Pinellas County Construction Licensing Board Rodney, at a February meeting. His management of the agency was criticized by an inspector general's report. [SCOTT KEELER   |   Times]

  5. New owners take over downtown St. Petersburg's Hofbräuhaus

    Retail

    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.
[SCOTT KEELER  |  TIMES]