The Mosaic Company announced Oct 28 it 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. Under the terms of the agreement, Mosaic would acquire the 22,000 acre South Pasture phosphate mine and beneficiation plant in Hardee County, Fla., a phosphate manufacturing facility in Plant City, Fla., and ammonia terminal and finished product warehouse facilities in Tampa. The CF Industries' facilities 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 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.
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 expenditures.
The transaction is expected to close in the first half of calendar 2014 and is not expected to impact Mosaic's shareholder distribution plans. Customary regulatory approvals are required.