US Cargill to vacate majority stake in fertilizer major Mosaic

HOUSTON (ICIS)--US agribusiness major Cargill said on Tuesday it plans to vacate its 64% ownership position in fertilizer major Mosaic in a deal that could be worth $24.3bn (€18.2bn).

Cargill and Mosaic, both based in Minnesota, jointly announced a transaction that would result in the distribution of Cargill's 286m share position in Mosaic to Cargill's shareholders and debt holders.

The $24.3bn figure was calculated using the $85.07/share closing price of Mosaic shares on Tuesday at the New York Stock Exchange.

The move could make Mosaic, the world’s largest producer of phosphate fertilizers, more attractive for a takeover, sources said.

The deal would leave Mosaic without a major shareholder.

Cargill said it plans to exchange approximately 179m of its 286m Mosaic shares with Cargill shareholders for all or a portion of their Cargill stock.

Cargill expects to exchange all of its remaining 107m Mosaic shares for Cargill debt owned by third parties.

Pursuant to a ruling from the US Internal Revenue Service (IRS), the transaction is expected to be tax free to Cargill, Mosaic and their respective shareholders, Cargill said.

"This transaction will bring significant benefits to our company and shareholders," Jim Prokopanko, Mosaic chief executive officer, said.

"Going forward, we will be better positioned to capitalize on the positive outlook for our industry, retain our market leading positions and reinforce our existing competitive advantages," said Prokopanko.

The transaction is expected to close in the second calendar quarter of 2011, the companies said.

Cargill, which markets Mosaic fertilizer products to its farmer customers, said it would continue its commercial relationship with Mosaic.

($1 = €0.75)

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