Vale Denies Mosaic Bid

Brazilian miner Vale says it is not seeking to buy fertilizer assets, following local press reports last week suggesting it was readying a $25bn bid for US-based fertilizer company Mosaic. “As previously indicated, the expansion of activities in the fertilizer industry is one of its strategic objectives,” says Vale. “To accomplish our goals, we have a wealth of organic growth options, which are strategic priorities and have high expected rates of return, superior to those presented by eventual investments in the acquisition of companies.” It plans to continue developing existing fertilizer assets including projects in Brazil, Argentina, Mozambique and Canada. “The implementation of these projects will turn Vale to be one of the leading global producers of potash, with an estimated production of more than 12m metric tons per year,” says Vale. Analysts and bankers following the Brazilian miner were mostly bewildered by unsourced local press reports suggesting it was preparing the $25bn bid. Vale is fresh off a series of conference calls and meetings with investors related to a convertible, at which it clearly stated that it is not pursuing big ticket M&A. Vale officials said the company evaluates all opportunities, but there was nothing major on the table to speak of. Gilberto Cardoso, analyst at Banif-Ixe notes that for an extra $10bn, Vale could acquire Anglo American, a far more attractive asset in terms of scale and diversification metrics. “Given our strong financial position and clear growth strategy, which is being implemented through substantial investments in recent years, totaling $51.7bn from 2004 to March 2009, Vale is a natural target of rumors and speculations about the acquisition of mining companies,” says Vale. “In this context, Vale is frequently approached by financial institutions seeking to offer acquisition opportunities of fertilizer producing companies.”