Loading
TAMPA BAY — The Mosaic Co. has signed a definitive agreement to acquire the phosphate business of CF Industries Inc. for $1.2 billion in cash plus another $200 million to fund CF Industries' retirement obligations.
Under the agreement, Mosaic is acquiring a phosphate manufacturing facility in Plant City, ammonia terminal and finished product warehouse facilities in Tampa and the 22,000-acre South Pasture phosphate mine and beneficiation plant in Hardee County. The CF Industries' facilities currently produce 1.98 million tons of phosphate fertilizer per year. Mosaic currently produces 9.04 million tons a year.
A big reason for the purchase is the proximity of CF Industries' South Pasture mine to Mosaic's planned Ona phosphate mine in Hardee County. The purchase is expected to save Mosaic roughly $500 million by not having to construct a $1 billion beneficiation plant.
Mosaic and CF Industries also signed strategic supply agreements for CF Industries to provide Mosaic with up to 1.1 million tons per year of ammonia. Under one agreement, Mosaic will purchase up to 799,000 tons annually for 15 years. Under a second agreement, Mosaic will purchase approximately 298,000 tons annually for three years from CF Industries' Trinidad operations.
Because of the acquisition, Mosaic has decided to put on hold a proposed ammonia manufacturing plant at its Faustina, La., phosphate facility.
“Uniting CF Industries' phosphate operations with Mosaic's creates an ideal combination that provides the opportunity for enhanced operating efficiencies and sustainability efforts, lower production costs and reduced capital investment...,” Mosaic President and CEO James Prokopanko, says in a press release.
The acquisition is expected to add 30 cents per share to Mosaic's 2015 earnings per share. The company's stock (symbol: MOS) is up this morning, to $46.06 per share. The transaction is expected to close in the first half of 2014.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
