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.

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