The Mosaic Company keeps getting bigger.
The Mosaic Company has announced it has acquired a fertilizer distribution business in Brazil and Paraguay for $350 million. Archer Daniels Midland Company previously owned the fertilizer business, and the purchase price assumed the delivery of $150 million in working capital at closing.
“The addition of ADM’s fertilizer distribution business in Brazil and Paraguay facilitates two critical strategic priorities for Mosaic,” said Mosaic President and Chief Executive Officer James T. Prokopanko. “It enhances our global growth strategy and expands our market access. This acquisition provides a critical distribution platform in one of the world’s fastest growing agricultural regions, and it complements our other recent strategic initiatives.”
The other initiatives Prokopanko is referencing is the company’s joint venture in Saudi Arabia, the company’s recent $1.4 billion acquisition of CF Industries’ phosphate business, as well as Mosaic’s continual potash expansion program.
The agreement states that Mosaic will acquire four blending and warehousing facilities in Brazil, one in Paraguay, and other warehousing and logistics service capabilities. The acquisition will increase Mosaic’s annual distribution in the region from approximately four million metric tonnes to about six million metric tonnes of crop nutrients.
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“Acquiring ADM’s fertilizer distribution business accelerates our existing growth plans in Brazil and provides access to new customers throughout the country and in Paraguay,” said Tobias Grasso, Mosaic’s Country Manager in Brazil. “We will gain scale and operating efficiencies through this acquisition, as well as a talented group of employees who will join our team.”
Additional terms of the acquisition include a five-year fertilizer supply agreement providing for Mosaic to supply ADM’s fertilizer needs in Brazil and Paraguay.
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