Yara International ASA said Dec. 1 that it has obtained relevant regulatory approvals to acquire a 60 percent stake in Galvani Indústria, Comércio e Serviços S/A (Galvani) allowing the integration process to start.
The Galvani operations comprise phosphate mining, single super phosphate (SSP) production and distribution of fertilizers in the center and northeast of Brazil. Galvani also owns licenses for two new greenfield phosphate mine projects in Brazil. In 2013, revenues amounted to US$352 million with an EBITDA of $48 million.
"We welcome the approvals from regulatory authorities which now allow us to close the acquisition and start the integration process. This acquisition complements Yara’s downstream presence in Brazil obtained with the acquisition of Bunge’s fertilizer division, and further strengthens Yara’s position in the world’s fastest growing agricultural region," said Torgeir Kvidal, Yara president and CEO.
The enterprise value is $318 million for 60 percent of Galvani. This comprises $132 million for the existing business and $186 million for the mining/production projects. Payment for the mining/production projects requires that certain project-related conditions are met. There will also be a post-closing adjustment of the working capital.
Galvani has a total SSP production capacity of approximately 1 million mt/y through the industrial complex of Paulinia and Luis Eduardo Magalhaes. Both sites source phosphate rock from two owned mines, Lagamar and Angico dos Dias, and the leased mine Irece. To cover future demand for phosphate rock, Galvani has two greenfield and one brownfield mining project under development, as follows:
Salitre (greenfield): up to ~1,200,000 mt phosphate rock per annum
Angico (brownfield): additional ~150,000 mt phosphate rock per annum
Santa Quiteria (greenfield): up to ~800,000 mt phosphate rock per annum
The projects under development also include new upgrading capacity for phosphate fertilizer. Start-up for the various projects is expected between 3 and 5 years from closing date.