This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

The Deal: Mosaic Picks-up CF Industries' Phosphate Business. Shares Rise

NEW YORK (TheStreet) -- Mosaic (MOS) said Monday it would acquire the phosphate business of rival CF Industries Holdings (CF) in a $1.4 billion deal aimed at expanding its production of the widely-sold crop nutrient.

Shares of Mosaic were rising 1.5% to $46.62 while CF Industries was advancing 4.6% to $219.23 in afternoon trading.

Terms of the deal call for Plymouth, Minn.-based Mosaic to pay $1.2 billion in cash for the operations, plus $200 million to fund CF Industries' asset retirement obligation escrow. The deal includes a 22,000-acre South Pasture phosphate mine and plant in Hardee County, Fla., a phosphate manufacturing facility in Plant City, Fla., and an ammonia terminal and finished-product warehouse in Tampa.

The assets to be acquired produce about 1.8 million tonnes of phosphate fertilizer per year, compared to Mosaic's annual production rate of 8.2 million tonnes. Mosaic said that the South Pasture facility is in proximity to a mine it is planning in Hardee County, and the company will save upward of $500 million by combining the operations instead of having to construct all new facilities on the planned site.

"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," Mosaic CEO James T. Prokopanko said.

The deal makes good on Mosaic's pledge to increase its production of phosphate, an in-demand chemical for farmers. The company has been attempting to reduce its dependence on potash, another key nutrient.

As part of the deal the companies also signed supply agreements for CF Industries to provide Mosaic with up to 1 million tonnes of ammonia annually, an agreement that Mosaic said will allow it to forego a proposed $1.1 billion ammonia manufacturing plant in Faustina, La.

CF Industries, of Deerfield, Ill., said that the agreements have "significant strategic value" to both firms. Chairman and CEO Stephen R. Wilson in a statement said, "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."

Dorsey & Whitney LLP served as lead outside counsel to Mosaic, with Mayer Brown LLP and Arnold & Porter LLP advising in specialist capacities. Rothschild Inc. provided a fairness opinion on the phosphate sale transaction to CF Industries' board. A Skadden, Arps, Slate, Meagher & Flom LLP team consisting of Brian Duwe, Richard C. Witzel Jr., Joseph Yaffe, Matthew Zisk, John Furfaro, Maxwell Miller, William Conway, Catherine Danz and Henry Eisenberg served as legal counsel to the company.

--By Lou Whiteman in Atlanta

Stock quotes in this article: MOS, CF 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs