Vale Ups Fertilizer Stake

Vale has unveiled a further step in its purchase of Fosfertil, following last week’s news that it has agreed to acquire Bunge’s stakes in BPI and Fosfertil for $3.8bn. After buying Bunge’s 42.3% stake in Fosfertil, which is listed on the BM&F, Vale moved to acquire an additional 15.5% in the company by purchasing a direct and indirect stakes belonging to Yara Brasil, another fertilizer developer. The move costs Vale $785m and gives it control over the equity capital of Fertifos, which in turn is Fosfertil’s controlling shareholder. The remaining stake in Fosfertil belongs to Mosaic. Itau analysts say it is not clear Vale will pursue the shares. The bank estimates that acquiring 100% of Fosfertil plus the stakes in BPI could cost Vale a total of $5.6bn. Vale says it has cash on hand to pay for the deal, but is also heard entertaining pitches for loan and bond financings.