Stranghoener: I can't comment on that. Well, how would you describe the tax implications? This deal was structured by Cargill and Mosaic, and then the charitable trust, to accomplish a number of objectives, and that includes a tax-free distribution of shares to Cargill shareholders. With that comes a private letter ruling from the IRS. And per that tax ruling, there's a two-year period following the close, during which we face some restrictions on what we can do with our equity. Whether it's issuing it, or whether it's buying it. And that also then pertains to any M&A transaction, any takeover of Mosaic. I think the talk you're hearing about is: does this deal make Mosaic more or less attractive as a takeover candidate? And I think that the answer to that is: over time, it probably makes it possible for us to attract a control premium if the right opportunity came along. And certainly if the right proposal came along, our board would look at it, and look at it seriously, and do what's in the best interest of shareholders. But during the next two years, there are restrictions on that possibility. So there's been a focus on, well, what if somebody came in and tried to make an offer, what would happen? That's become pure speculation. Again, suffice it to say, there are certain restrictions for the next two years, and beyond that there would be no restrictions. Are there restrictions on buybacks, too?
|Mosaic CFO Larry Stranghoener|
Certainly at the top of our list for cash allocation is growth -- specifically growth in our potash business. So we are investing five-plus billion dollars over the next ten years to expand our capacity in potash by 50%, or about five million tons. On top of which would come this 1.3 million tons from Esterhazy. We've got a number of major projects underway at all three of our mine sites there. And we think that these will be very handsomely rewarding investments. The $5 billion you're spending over the next 10 years: How long before the projects begin to bear fruit? We'll start to see some additional tons coming in 2012 already. There have been some dribbles already, but that will be the first major increment. This is not entirely accurate, but to put it very simply: think of these five million tons coming on stream roughly ratably from 2012 through 2018 or '19 or so. he fundamentals in your industry are strong right now. But what do you worry about? What concerns might you have looking into the future beyond 2011? As you say, the fundamentals are very strong right now, and it's a great time to be in this industry. The world population continues to grow. Diets are improving everywhere in the world, especially in high-growth countries such as China, India and Brazil. Grain and oilseed demand continues to grow. The demand for higher yields continues, and that suggests a very healthy demand for fertilizer. And so we like the supply demand outlook. That doesn't mean it's not going to be a cyclical business with some ups and downs along the way, but we think the long-term demand story is really a very, very good one. I think the biggest worry on the horizon would be if something changes that fundamental demand outlook. If something happens in the world economy to cause demand for grains and oilseeds to somehow decline or grow at a lesser rate. About the only thing that comes to mind on that front is if somehow the China story comes to a halt. China is a growth engine for so much of the world's economy when it comes right down to it. The same is true in the agricultural space. If something were to happen in China -- and it's hard to imagine what it is -- but if there's something out there that causes their growth rate to tumble, their economy to stumble, I think that's the greatest external threat out there. This is part two of a two-part interview with Mosaic CFO Larry Stranghoener. Click here for part one. -- By Scott Eden in New York >To contact the writer of this article, click here: Scott Eden. >To follow the writer on Twitter, go to http://twitter.com/ScottEden. >To submit a news tip, send an email to: firstname.lastname@example.org.