PLYMOUTH, Minn., April 15, 2014 /PRNewswire/ -- The Mosaic Company
(NYSE: MOS) signed definitive agreements today with Archer Daniels
Midland Company (NYSE: ADM) to acquire its fertilizer distribution
business in Brazil and
Paraguay for $350 million. The purchase price assumes the
delivery of $150 million in working
capital at closing. This acquisition is expected to significantly
accelerate Mosaic's previously announced growth plans in
Brazil as well as replace a
substantial amount of planned internal investments in that country.
Under the terms of the agreement, Mosaic would acquire four
blending and warehousing facilities in Brazil, one in Paraguay and additional warehousing and
logistics service capabilities.
The acquisition of ADM's fertilizer distribution business would
increase Mosaic's annual distribution in the region from
approximately four million metric tonnes to about six million
metric tonnes of crop nutrients. In addition to the acquisition,
Mosaic is in process of completing approximately $100 million in projects including expansion of
the company's port terminals, plants and production
capabilities.
"The addition of ADM's fertilizer distribution business in
Brazil and Paraguay facilitates two critical strategic
priorities for Mosaic. It enhances our global growth strategy and
expands our market access," said Mosaic President and Chief
Executive Officer James T.
Prokopanko. "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, including our joint venture in Saudi Arabia, our recent acquisition of CF
Industries' phosphate business and our ongoing potash expansion
program."
"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."
The parties have also negotiated the terms of five-year
fertilizer supply agreements providing for Mosaic to supply
ADM's fertilizer needs in Brazil
and Paraguay.
Mosaic will fund the acquisition with cash from operations. The
transaction is not expected to impact Mosaic's shareholder
distribution plans. The proposed sale will be contingent on
customary regulatory approvals.
About The Mosaic Company
The Mosaic Company is one of the world's leading producers and
marketers of concentrated phosphate and potash crop nutrients.
Mosaic is a single source provider of phosphate and potash
fertilizers and feed ingredients for the global agriculture
industry. More information on the Company is available at
www.mosaicco.com.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
about the acquisition and assumption of certain related liabilities
of the fertilizer distribution business in Brazil and Paraguay of Archer Daniels Midland Company
("ADM") and the fertilizer supply agreements with ADM; the benefits
of the transactions with ADM; other proposed or pending future
transactions or strategic plans and other statements about future
financial and operating results. Such statements are based upon the
current beliefs and expectations of The Mosaic Company's management
and are subject to significant risks and uncertainties. These risks
and uncertainties include but are not limited to risks and
uncertainties arising from difficulties with failure to complete
the proposed acquisition with ADM, unexpected delays in completion
of such transaction, realization of the benefits of the
transactions with ADM, including the risks that the acquired assets
may not be integrated successfully or that the cost or capital
savings from the transactions may not be fully realized or may take
longer to realize than expected; customer defaults; the
predictability and volatility of, and customer expectations about,
agriculture, fertilizer, raw material, energy and transportation
markets that are subject to competitive and other pressures and
economic and credit market conditions; the level of inventories in
the distribution channels for crop nutrients; changes in foreign
currency and exchange rates; international trade risks and other
risks associated with Mosaic's international operations; changes in
government policy; changes in environmental and other
governmental regulation, including greenhouse gas regulation; the
effectiveness of the Company's processes for managing its strategic
priorities; reduction of Mosaic's available cash and liquidity, and
increased leverage, due to its use of cash and/or available debt
capacity to fund share repurchases and strategic investments; and
other risks and uncertainties reported from time to time in The
Mosaic Company's reports filed with the Securities and Exchange
Commission. Actual results may differ from those set forth in the
forward-looking statements.
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SOURCE The Mosaic Company