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FACTBOX-Cargill's complex spin-off of Mosaic
January 19, 2011 / 12:35 AM / 7 years ago

FACTBOX-Cargill's complex spin-off of Mosaic

NEW YORK, Jan 18 (Reuters) - Privately held agribusiness Cargill Inc [CARG.UL] plans to spin-off its 64 percent stake in fertilizer company Mosaic Co (MOS.N), now valued at $24.3 billion.

The complicated tax-free transaction could put Mosaic, created by Cargill in 2004, in play. Here are some facts about the deal and the companies:

* Cargill, one of the largest private companies in the world, is to spin off its 64 percent stake in Mosaic, or 286 million shares, to Cargill’s shareholders and debt holders. For more details [ID:nN18168494]

* Mining investment bankers said the action could eventually put Mosaic in play, with global mining companies likely bidders. Mosaic has a market value of about $37 billion.

* The spin off is expected to be tax free to Cargill, Mosaic and their shareholders.

* It will happen in three steps. Mosaic recapitalizes its shares into three classes, including a high-vote class to comply with tax rules. Creation of a Class B stock will give its holders 10 votes for every share for the election of directors.

* In the second step Cargill will exchange 179 Mosaic shares with its Charitable Trusts and other Cargill shareholders, and exchange 107 million Mosaic shares with Cargill debt holders. Cargill’s charitable trusts were formed through the estate planning of Margaret Cargill, one of Cargill’s largest shareholders, who died in 2006, according to the company.

* Up to 157 million of those shares (35 percent of Mosaic) will be sold in the first 15 months after the deal closes. Those shares will come from debt holders (107 million) and charitable trusts (50 million). The deal provides for the sale of the rest of the shares at a later date. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

* For a graphic on the steps: here

* For Mosaic's fact sheet on the deal: here

* For the press release announcing the deal: here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

* Mosaic’s total outstanding shares will not change. Mosaic’s public float is currently 160 million shares. Cargill owns 286 million shares, making the total number of shares 446 million.

* Cargill’s 286 million shares are: 115 million common shares; 60 million Class A; 111 million Class B.

* Founded in 1865, Cargill employs 131,000 people in 66 countries, and in fiscal year 2010 said it had net earnings of $2.6 billion on sales and other revenue of $107.9 billion.

* Cargill products include: animal feed, food and beverage ingredients; products to make toiletries; sea salt harvested from the Pacific Ocean.

* In 2004, Cargill combined its crop nutrition business with IMC Global, creating Mosaic and leaving it with a 64 percent stake.

* Mosaic had a market capitalization of about $5 billion in early 2006. It now has about $37 billion market capitalization.

* Mosaic is one of the world’s largest producers of concentrated phosphate and potash, two of the primary nutrients required to grow food grains and other crops. It has about 7,400 employees in eight countries. (Compiled by Megan Davies, Ernest Scheyder, Michael Erman, Euan Rocha)

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