Fertinal Seen as Good Match for Mosaic

Mexican fertilizer company Fertinal is a good strategic match for US-based Mosaic, according to a mining M&A banker in Mexico. According to press reports, Mosaic is in talks to buy Fertinal for about $1bn. “The market would welcome Mosaic’s acquisition of Fertinal,” says the banker, who is at a boutique not working on the transaction. “Mosaic could make the necessary investments to get the company to produce phosphate rock again,” the banker says. He explains that the company has had to buy phosphate rock from third parties after a hurricane impacted its Baja California mine in 2001. He also says Fertinal has a processing plant in Lazaro Cardenas, Michoacan that he believes to be very valuable in a strategic sense. “It is in a privileged location,” he explains. The deal would also be beneficial to Mosaic, the banker says, adding that “it makes all the sense in the world for Mosaic to buy Fertinal so it can expand in a market where it doesn’t have an industrial presence.” Fertinal has been up for sale for a while. In the first half of 2008, Fertinal began exploring options to recapitalize and restart operations, hiring UBS to advise. Calls to UBS bankers to see if they were still advising Fertinal went unanswered. Mosaic does not return calls for comment.