The Mosaic Company MOS
signed definitive agreements today with Archer Daniels Midland Company ADM to acquire its fertilizer distribution business in Brazil and Paraguay
for $350 million. The purchase price assumes the delivery of $150 million in
working capital at closing. This acquisition is expected to significantly
accelerate Mosaic's previously announced growth plans in Brazil as well as
replace a substantial amount of planned internal investments in that country.
Under the terms of the agreement, Mosaic would acquire four blending and
warehousing facilities in Brazil, one in Paraguay and additional warehousing
and logistics service capabilities.
The acquisition of ADM's fertilizer distribution business would increase
Mosaic's annual distribution in the region from approximately four million
metric tonnes to about six million metric tonnes of crop nutrients. In
addition to the acquisition, Mosaic is in process of completing approximately
$100 million in projects including expansion of the company's port terminals,
plants and production capabilities.
"The addition of ADM's fertilizer distribution business in Brazil and Paraguay
facilitates two critical strategic priorities for Mosaic. It enhances our
global growth strategy and expands our market access," said Mosaic President
and Chief Executive Officer James T. Prokopanko. "This acquisition provides a
critical distribution platform in one of the world's fastest growing
agricultural regions, and it complements our other recent strategic
initiatives, including our joint venture in Saudi Arabia, our recent
acquisition of CF Industries' phosphate business and our ongoing potash
expansion program."
"Acquiring ADM's fertilizer distribution business accelerates our existing
growth plans in Brazil and provides access to new customers throughout the
country and in Paraguay," said Tobias Grasso, Mosaic's Country Manager in
Brazil. "We will gain scale and operating efficiencies through this
acquisition, as well as a talented group of employees who will join our team."
The parties have also negotiated the terms of five-year fertilizer supply
agreements providing for Mosaic to supply ADM's fertilizer needs in Brazil and
Paraguay.
Mosaic will fund the acquisition with cash from operations. The transaction is
not expected to impact Mosaic's shareholder distribution plans. The proposed
sale will be contingent on customary regulatory approvals.
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