Brazilian mining giant Vale S.A., Rio de Janeiro, said Feb. 10 that through its subsidiary, Mineração Naque S.A., it has entered into an option contract with The Mosaic Co. The agreement gives Vale the right to buy shares of Fertifos Administração e Participações S.A. (Fertifos) and Fertilizantes Fosfatados S.A. – Fosfertil (Fosfertil), a company listed on the BM&F Bovespa. This contract is part of the recently announced process of acquiring 100 percent of the equity capital of Bunge Participações e Investimentos S.A. (BPI) (GM Feb. 1, p. 1).
The exercise of the option is subject to certain conditions, among them the effective acquisition of the fertilizer assets of Bunge Group in Brazil. The option gives Vale the right to acquire a direct and indirect stake of 20.27 percent in the equity capital of Fosfertil, comprised of 27.27 percent of common shares and 16.65 percent of preferred shares.
The strike price of the option contract is US$1,029,811,129.77, which was based on the same price per share – US$12.0185 – agreed to with BPI, Fertilizantes Heringer S.A. (Heringer), Fertilizantes do Paraná Ltda. (Fertipar), and Yara Brasil Fertilizantes S.A. (Yara) for the acquisition of their direct and indirect stakes in Fosfertil.
After the acquisition of the direct and indirect stakes of BPI, Heringer, Fertipar, Yara, and Mosaic is concluded, Vale will hold 78.90 percent of the equity capital of Fosfertil, corresponding to 99.81 percent of common shares and 68.24 percent of preferred shares. The total price to be paid for the acquisition of 78.90 percent of the equity capital of Fosfertil is US$4,006,876,600.55.
Pursuant to Brazilian corporate law and capital markets regulations, and once the acquisition of the above mentioned stakes is concluded, Vale will launch a mandatory offer to buy the remaining 0.19 percent of the common shares held by the minority shareholders of Fosfertil at the same price per share agreed upon among BPI, Heringer, Fertipar, Yara, and Mosaic.
In addition to the acquisition of Fosfertil shares, Vale has also agreed to acquire from Mosaic a processing plant located in Cubatão, state of São Paulo, Brazil, for US$50 million. Vale said it has a nominal capacity to produce 300,000 mt/y of single superphosphate (SSP), which is the phosphate nutrient used most often in Brazil.
Mosaic confirmed the transactions and said they will have no impact on Mosaic’s significant fertilizer blending and distribution business in the country and its SSP production and port activities in the Paranagua complex.