• Categories
  • Archives

Vale Buys for US$ 3.8 Billion Bunge’s Fertilizer Operation in Brazil

Bunge BrazilBrazil’s mining company Vale and multinational company Bunge announced the signing of an agreement for the purchase, by the Brazilian enterprise, of assets pertaining to Bunge’s fertilizer manufacturing operations in Brazil.

The US$ 3.8 billion deal includes the nutrients business and Bunge’s stake in Fosfertil (Fertilizantes Fosfatados S.A.), a supplier of raw materials for fertilizer manufacturing. The transaction has a net value of roughly US$ 3.5 billion and does not involve fertilizer retail or distribution businesses.

Vale will acquire Bunge’s 42.3% stake in Fosfertil, as well as its fully-owned phosphate mines and manufacturing plants in Brazil. Bunge’s annual phosphate rock production capacity and its share of Fosfertil are equivalent to approximately 3 million tons.

Bunge will retain its fertilizer retail business in Brazil and will sign a deal to supply Vale up until 2012, with a one-year extension option. Bunge will also keep its fertilizer operations in Argentina and the United States, as well as its 50% stake in the joint venture with the Office Cherifien des Phosphates (OCP), in Morocco.

“This is an appropriate moment for us to leave fertilizer manufacturing in Brazil. In order to keep growing, we would have to invest significant capital. Given the uncertainties regarding international prices and the local exchange rates, we believe that it will be better to invest in other opportunities,” said Alberto Weisser, Bunge’s CEO, in a press release.

“Besides, large global mining companies are entering the sector and diversifying their mining portfolios. We are glad that our business will be transferred to Vale, which shares with Bunge a long-term commitment with Brazil,” added Weisser.

“This operation is of utmost importance to consolidating Vale’s strategy of targeting Brazil as the leading market for its phosphate derivatives production, given the potential of local mines, as well as the expansion of projects developed abroad, such as Bayóvar and, in the future, Evate, all of which will have their output destined mainly to the Brazilian market,” claimed Roger Agnelli, the president of Vale, also in a release.

“We are glad because the purchase of these assets, combined with the various potassium projects, which involve high-quality deposits in the main locations worldwide, contributes to Vale’s fast growth strategy, enabling the establishment of a new global leader in the fertilizer industry,” stated Agnelli.

Bunge expects the transaction, which is liable to the usual closing conditions, including government approval concerning mineral concessions, to be concluded in the second quarter of 2010.

Anba

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil’s Petrobras Goes Full Steam Ahead with US$ 92 Billion Investment

Petrobras, Brazil's government-controlled oil and gas multinational, announced this Wednesday, February 4,  its domestic ...

Brazilian President Pans Belligerent Chavez on Bolivian Crisis

All is ready in Santiago de Chile to receive South American leaders to discuss ...

Brazil Wants to Sell More than Gems on the Rough

Entrepreneurs from the southern Brazilian state of Rio Grande do Sul want to sell ...

Sí£o Paulo-Orlando Daily: Brazil TAM’s New Offer

Brazilian flagship airline TAM has started, this Friday, November 21, a new daily flight ...

Families of Soldiers Killed in Iraq Join Anti-Bush Protests in Argentina

US President George W. Bush arrived in Mar del Plata, Argentina, on Thursday night ...

Brazilian Amazon Residents Get to Exploit Forest in Pioneer Project

The Ambé Project, the largest forest management project by a local community in a ...

Brazil Increases Its Appeal to Foreign Investors

The EM20 Index, developed by PricewaterhouseCoopers, of the United Kingdom shows that Brazil has ...

Brazil’s GDP Grows 4.2% in First Half

Brazil’s first semester GDP growth closed out up 4.2%, compared to the first half in ...

Brazil and Portugal Cement Business Bonds

In Portugal, one of the major goals of the Brazilian mission commanded by Vice-President ...

Opposition Plans to Impeach Lula Do Not Disturb Brazil Stocks

Latin American stocks extended Wednesday’s (March 29) gains, with Brazilian shares getting a boost ...