May 27, 2010 / 10:08 PM / 9 years ago

Vale hopes to clinch deal for Mosaic Brazil assets

* Option to buy Mosaic’s Fosfertil assets still stands

* Vale pays $4.7 bln for Bunge, Fosfertil assets

* Vale to buy rest of Fosfertil shares in tender offer

SAO PAULO, May 27 (Reuters) - Vale, the Brazilian mining company pushing into potash, said on Thursday that the $1.03 billion purchase of Mosaic’s stake in Brazilian fertilizer producer Fosfertil is likely to be concluded soon.

Vale (VALE.N), the world’s largest iron ore miner, told regulators it had sealed the purchase of 58.6 percent of Fosfertil’s capital and Brazilian fertilizer assets of Bunge Ltd (BG.N) for a total $4.7 billion.

Rio de Janeiro-based Vale said an accord to buy Mosaic’s (MOS.N) 20.3 percent stake in Fosfertil’s capital is still under way. Vale said in a regulatory filing that the transaction could be finalized in “the near future.” It did not elaborate.

The plan to acquire more potash assets is in line with Vale Chief Executive Roger Agnelli’s plan to grow and diversify its revenue stream away from metals and minerals, boosting its exposure to fertilizers. Vale’s growing bets on fertilizer are part of a strategy to benefit from rising global food consumption and agricultural output in South America and Asia.

“The acquisition is in line with the strategy of becoming a global leader in this industry,” the filing said. “Given the quality of the assets purchased, we expect returns considerably outpacing our average cost of capital for the next years.”

Early in 2009, Vale spent $850 million on the purchase of potash assets in Argentina and Canada.

Agnelli recently indicated Vale is interested in smaller acquisitions and that he hopes to achieve the company’s long-term growth goals through organic projects where he sees the best value.

Among the assets that Vale bought from Bunge are phosphate rock mines and phosphate assets and a direct and indirect stake of 42.3 percent in the capital of Fosfertil.

Bunge decided to abandon phosphate mining in which it had operated for years, after the sector recently grew more competitive with major metals miners buying into it. A stronger Brazilian currency has also pushed up costs.

Vale plans to buy out the remaining 0.2 percent stake of Fosfertil held by minority shareholders in a tender offer that will be filed in coming weeks, the filing added.

Preferred shares of Vale VALE5.SA, the company’s most widely traded class of stock, surged 6.3 percent to 42.10 reais. (Reporting by Guillermo Parra-Bernal, editing by Matthew Lewis)

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