(Updates with details on deal, background)
April 15 U.S. fertilizer producer Mosaic Co
said on Tuesday it will buy Archer Daniels Midland Co's
fertilizer distribution business in Brazil and Paraguay
for $350 million.
Mosaic will acquire four blending and warehousing facilities
in Brazil, one such facility in Paraguay and additional
warehousing and logistics service capabilities. The deal is
subject to regulatory approvals.
The acquisition gives Mosaic "a critical distribution
platform in one of the world's fastest growing agricultural
regions," Chief Executive Officer James Prokopanko said in a
ADM said it had been "difficult for this business to
consistently meet our return objectives".
Brazil is one of the world's biggest fertilizer importers
due to nutrient-deficient soil and its huge annual crops of
corn, soybeans and sugar cane. However, it can be difficult to
move crops and nutrients because Brazil's transportation system
is prone to bottlenecks.
The acquisition of ADM's distribution business will
accelerate Mosaic's growth plans in Brazil and "replace a
substantial amount of planned internal investments" in the
country, Mosaic said.
As part of the deal, Mosaic agreed to supply ADM's
fertilizer needs in Brazil and Paraguay for five years.
Last year, Bunge Ltd completed the sale of its
Brazilian fertilizer operations to Yara International
for $750 million in a move to streamline its agribusiness
dealings. Through a long-term agreement with Yara, Bunge
continues to supply fertilizer to farmers in Brazil.
(Reporting by Rod Nickel in Winnipeg, Manitoba, and Tom
Polansek in Chicago; editing by Peter Galloway)