US potash giant Mosaic Co. (NYSE:MOS) has agreed to buy part of Brazilian conglomerate Vale SA’s fertilizer business for $2.5bln.
Mosaic said the deal will see it become the leading fertilizer production and distribution company in Brazil, one of the world's preeminent agricultural markets.
Joc O'Rourke, Mosaic’s president and chief executive officer, said: “This acquisition provides Mosaic a tremendous opportunity to capitalize on the fast-growing Brazilian agricultural market and from improving business conditions.”
He added: "We see this as an ideal strategic fit for Mosaic.”
Vale, the world’s largest iron ore miner, will receive $1.25bin in cash and $1.25bln in newly issued shares of Mosaic, giving the Brazilian group a roughly 11% stake in the Minnesota-based firm.
After the deal closes by late 2017, Vale will have the right to pick two members of Mosaic's board.
Mosaic said it expects the acquisition to be accretive to its earnings per share in 2018.