Vale fertilizer unit sale 'advancing'

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Thursday, October 6, 2016

Brazilian mining giant Vale's plans to sell its fertilizer assets are advancing despite a request by national development bank BNDES to review the transactions more carefully, two unnamed sources were quoted as saying by Reuters.

However, terms of the deal with Minnesota-based Mosaic to offload certain assets of Vale's fertilizer unit Vale Fertilizantes should not experience significant changes, one of the sources was quoted as saying.

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Mosaic could pay about US$3.6bn for the assets, according to one of the sources. The sale of other Vale fertilizers assets is being negotiated with Norway's Yara International, the other source reportedly added.

Mosaic has been reported to be eyeing the fertilizer unit since June. At the time, three sources told Reuters that a cash-and-stock deal was seen as the best option.

The deal would give Vale a 12-15% stake in Mosaic, depending on the size of the stock portion, one of the sources reportedly said.

Vale Fertilizantes was formed when Vale acquired Fosfertil and the nutrient assets of Bunge in 2010. It has assets in Argentina, Brazil, Canada, Mozambique and Peru.

Mosaic acquired Archer Daniels Midland's South American fertilizer business in December 2014, a deal that included five blending facilities in Brazil and Paraguay.

Pension funds Funcef, Previ, Petros and Funcesp, all linked to state-run institutions, hold 49% of Valepar, the company that controls Vale with around 53% of its common stock. Other Valepar shareholders are local bank Bradesco, BNDES with a 6.7% direct stake and Japan's Mitsui.