PLYMOUTH, Minn. — The Mosaic Co. plans to buy the phosphate business of CF Industries in a deal the fertilizer producer values at about $1.4 billion.
The Plymouth, Minn., company said Monday it will pay $1.2 billion in cash, plus $200 million to fund an escrow account CF Industries maintains for certain environmental obligations related to its Florida facilities
The deal gives Mosaic a Florida phosphate mine and treatment and processing plant, plus an ammonia terminal and finished product warehouse facilities in Tampa.
Mosaic expects the deal to help it save about $500 million because it won't have to build a new processing plant. The CF Industries mine Mosaic is buying is located near the site for another mine Mosaic plans. The company plans to invest the money it saves in developing phosphate rock reserves and improving existing mines.
Mosaic also said it signed supply agreements under which CF Industries will provide Mosaic with about 1 million metric tons per year of ammonia.
Mosaic CEO James T. Prokopanko said in a statement the deal will help lower production costs and reduce capital investment.
The acquisition also is expected to add about 30 cents per share to Mosaic's 2015 earnings, not counting debt financing costs. It is expected to close in the first half of next year.
Shares of Mosaic climbed about 1.6 percent, or 75 cents, to $46.69 Monday morning while broader trading indexes edged down at the start of trading. The stock is down about 18 percent since the start of the year. CF Industries shares jumped more than 4 percent, or $8.45, to $218.07.