April 16, 2014


Mosaic acquires ADM's Brazil and Paraguay fertiliser distribution business




The Mosaic Company signed definitive agreements to acquire Archer Daniels Midland Company's (ADM) fertiliser distribution business in Brazil and Paraguay for US$350 million.


The purchase price assumes the delivery of $150 million in working capital at closing.


The acquisition of ADM's fertiliser distribution business would increase Mosaic's annual distribution in the region from approximately four million tonnes to about six million tonnes of crop nutrients. In addition to the acquisition, Mosaic is in process of completing approximately US$100 million in projects including expansion of the company's port terminals, plants and production capabilities.
Mosaic will acquire from ADM four blending and warehousing facilities in Brazil, one in Paraguay and additional warehousing and logistics service capabilities.


"The addition of ADM's fertiliser 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 fertiliser 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."


As part of the transaction, ADM will purchase fertiliser from Mosaic after the closing and will continue to supply certain fertiliser customers in Brazil and Paraguay. The parties have negotiated the terms of five-year fertiliser supply agreements providing for Mosaic to supply ADM's fertiliser needs in Brazil and Paraguay.


"The lengthy value chain inherent in the fertiliser business, along with strong competition from fully integrated companies that have entered the sector, has made it difficult for this business to consistently meet our return objectives. By selling our blending assets--while retaining our distribution business--we will be improving our returns while maintaining our important origination relationships with key growers in Brazil and Paraguay," says ADM CEO Patricia A. Woertz.


Mosaic will fund the acquisition with cash from operations. The transaction is not expected to impact Mosaic's shareholder distribution plans and will be contingent on customary regulatory approvals.

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