UPDATE 2-Mosaic to buy CF's phosphate business for $1.2 billion

Mon Oct 28, 2013 12:07pm EDT
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(Adds Mosaic interview, CF, shareholder comments, details)

By Rod Nickel

Oct 28 (Reuters) - Mosaic Co said on Monday that it would buy the phosphate business of fellow U.S. fertilizer producer CF Industries Holdings Inc for $1.2 billion in cash, in a deal that bolsters each company's core business.

The deal signals Illinois-based CF's increased focus on its core nitrogen fertilizer products and comes after Mosaic has said it was looking to increase its production of phosphate, one of three critical crop nutrients.

Shares of CF, the largest U.S. nitrogen producer, was up 3.8 percent at $217.62 in midday New York Stock Exchange trading, while Mosaic, the world's biggest producer of finished phosphate products, rose 0.2 percent to $46.02.

Minnesota-based Mosaic will acquire the South Pasture phosphate mine and plant, a phosphate manufacturing plant and ammonia terminal and warehouse facilities, all of which are in Florida.

The facilities produce about 1.8 million tonnes of phosphate fertilizer per year, topping up the annual 8.2 million tonnes produced by Mosaic and adding about 30 cents per share to its 2015 earnings, the company said. It expects the deal to close in the first half of 2014.

CF will also supply Mosaic with 1 million tonnes a year of ammonia, a nitrogen product used in making finished phosphate products.

This will allow Mosaic to scrap its plans to build a $1.1 billion ammonia manufacturing plant in Faustina, Louisiana.   Continued...