Fertilizer giants agree to $2.5B acquisition

Nathan Bomey

Plymouth, MN — Plymouth, MN.-based fertilizer giant The Mosaic Company said Monday that it had agreed to acquire a Brazilian fertilizer firm with a broad footprint in phosphate crop nutrients and potash.

Mosaic will acquire Vale S.A. in a deal valued at $2.5 billion, or nearly $2.8 billion if Vale hits certain benchmarks within two years.

Vale's five Brazilian phosphate rock mines, four chemical and fertilizer factories and its potash facility will help make Mosaic "the leading fertilizer production and distribution company in Brazil," Mosaic said in a statement.

Mosaic stock (MOS) fell 2.4% to $28.86 in early trading.

Mosaic will pay for the deal with a 50-50 combination of cash and stock. The company estimated it could generate more than $80 million in after-tax "synergies" following the combination, which often comes through cost cuts, purchasing power and revenue opportunities.

"This acquisition provides Mosaic a tremendous opportunity to capitalize on the fast-growing Brazilian agricultural market and from improving business conditions," Mosaic CEO Joc O'Rourke said in a statement. "We see this as an ideal strategic fit for Mosaic. We have proven expertise in phosphate mining and manufacturing, a strong record of successful acquisition integration, and extensive relationships and experience in Brazil."

After adding Vale's 8,000 employees, Mosaic will have about 17,000 workers.

Mosaic said its U.S. phospate plants would "continue to operate at high rates in order to meet strong and growing global demand."