28 October 2013
Details
The Mosaic Company (Mosaic)
has signed a definitive agreement
to acquire the phosphate business of CF Industries, Inc.
for $ 1.2 billion in cash plus $200 million to fund
CF Industries' asset retirement obligation escrow.
Mosaic would acquire
* the 22,000-acre South Pasture phosphate mine
and beneficiation plant in Hardee County, Fla., USA.,
* a phosphate manufacturing facility in Plant City, Fla.,
* and ammonia terminal and finished product warehouse facility
in Tampa.
The CF Industries currently produce
approximately 1.8 million tonnes of phosphate fertilizer per year,
which would be additive to the annual 8.2 million tonnes
currently produced by Mosaic.
The transaction is expected to close in the first half of calender 2014.
Customary regulatory approvals are required.
The phosphate acquisition
* would be additive to Mosaic's existing Florida operations, and
* complements the company's plans
to mine phosphate rock reserves
in Hardee and Desoto counties and
extensions of the existing Wingate mine.
The proximity of CF Industries' South Pasture mine to
Mosaic's planned Ona phosphate mine in Hardee County
would allow Mosaic to take advantage of the synergies
associated with the combined mining assets.
The existing infrastructure at South Pasture would result in
Mosaic saving approximately $ 500 million by
not having to construct a $ 1 billion beneficiation plant.
Mosaic would instead invest approximately $ 500 million
to develop phosphate rock reserves and improve existing mines.
Mosaic,
James T. Prokopanko, President and Cheif Executive Officer,
- 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.
- The addition of these new phosphate assets and securing access
to long-term ammonia supplies solidifies Mosaic's position
among the largest and best phosphate producers in the World.
Strategic supply agreements
- Mosaic and CF Industries also signed strategic agreements
underwhich CF Industries will provide Mosaic with up to
approximately 1.0 million tonnes per year of ammonia.
- Under one agreement, Mosaic will purchase up to
725,000 tonnes annually for 15 years with pricing
based on a formula tied to the prevailing price of U.S. natural gas.
This agreement is expected to commence prior to January 2017.
- Under a second agreement, Mosaic will purchase approximately
270,000 tonnes annually for three years from CF Industries'
Trinidad operation at CFR Tampa market-based pricing,
In light of these supply arrangements,
Mosaic has decided to forego
its proposed ammonia manufacturing plant at its
Faustina, La. phosphate facility,
saving approximately $1.1 billion in future capital expenditure.
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