* Buys business from Bunge to boost products, distribution
* Expects $25 mln in synergies by 2014
* Analyst: pricing fair, acquisition fits well
OSLO, Dec 7 Norway's Yara has agreed to
buy the Brazilian fertilizer business of commodities giant Bunge
in a deal valued at $750 million, giving it a wider
product range and distribution network in a key market.
Yara, the world's biggest maker of nitrogen-based
fertilisers, will buy Bunge's brands, warehouses and 22 blending
facilities, and has also agreed on a long-term supply deal with
the U.S. firm, the companies said on Friday.
Bunge's Brazilian unit buys fertiliser on the market and
blends it into different qualities, tailoring the product based
on customer needs.
It also has 350,000 tonnes of production capacity, a boost
for Yara which needs to add 4 million tonnes of capacity to its
20 million tonne output to meets its ambitious 2016 target.
"This acquisition fits like a glove," equity analyst Per
Haagensen at brokerage Fondsfinans said. "And the price looks
fair. If they get the synergies, it is a very good price."
The deal has an enterprise value of $750 million, including
net operating capital value of $385 million and other assets
valued at $365 million, and Yara expects to achieve $25 million
in synergies by 2014.
Bunge's Brazilian fertilizer business had revenues of $2.6
billion in 2011 and earnings before interest, taxes,
depreciation and amortization (EBITDA) of $77 million.
Yara is expanding as tight grain markets drive strong demand
for fertilisers and Asia's rapid industrialisation support long
But falling coal prices have made it cheaper to produce
fertilisers in China, putting pressure on global prices.