LONDON (ICIS)--Fertilizer producer Mosaic has agreed to acquire the phosphate business of CF Industries for $1.2bn in cash, plus $200m to fund CF Industries’ asset retirement obligation escrow, it said on Monday.
In a statement, Mosaic said it had agreed to acquire the 22,000-acre South Pasture phosphate mine and beneficiation plant in ?xml:namespace>
The facilities produce at present approximately 1.8m tonnes of phosphates per year, which would add to the annual 8.2m tonnes currently produced by Mosaic.
“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 – creating value for our shareholders, customers and employees,” said James Prokopanko, Mosaic president and CEO.
CF Industries has also agreed to supply Mosaic with approximately 1m tonnes/year of ammonia.
Mosaic will purchase up to 725,000 tonnes annually for 15 years under a formula tied to the prevailing price of
Mosaic will also buy approximately 270,000 tonnes annually for three years from CF Industries’ Trinidad operations at CFR (cost and freight)
“The sale of our phosphate operations represents good value for our shareholders and the full set of transactions enables us to sharpen the strategic focus on our nitrogen business,” said Stephen Wilson, CF Industries chairman and CEO.
The transaction is expected to close in the first half of 2014.
The announcement comes on the heels of the news in early October that