The Mosaic Co. said Monday it signed an agreement to acquire the phosphate business of CF Industries Inc. for $1.2 billion in cash, including property and facilities in Hillsborough and Hardee counties.
The deal that must gain regulatory approval reenforces Mosaic’s ongoing plans to mine phosphate rock reserves in Hardee, DeSoto and Manatee counties.
Mosaic’s purchase enhances its standing as the world’s largest producer of phosphate based fertilizer. It would save $500 million from not having to build a $1 billion plant in Hardee County, which the company plans to invest in phosphate rock reserves and improving existing mines.
Investors applauded the deal between the two publicly traded companies, boosting their stock prices in trading Monday.
Mosaic will add 700 CF Industries Central Florida employees to its 3,200 workers in the region.
“We don’t anticipate any reduction in force,” Mosaic spokeswoman Martha Monfried said. “After receiving regulatory approval, we will be combining the Central Florida work forces and should be close to 4,000 strong.”
The transaction is expected to close in the first half of 2014.
“We are thrilled to add CF Industries’ Florida phosphate employees and facilities to the Mosaic family,” said Gary N. “Bo” Davis, Mosaic Senior Vice President - Phosphate Operations. “We look forward to working together to help the world grow the food it needs while strengthening our operations and deep commitments to the Central Florida communities.”
The deal adds about 1.8 million tons of CF Industries phosphate fertilizer per year to the 8.2 million tons of fertilizer Mosaic produces.
The phosphate sale includes the 22,000-acre South Pasture Hardee County Phosphate Rock Mine and plant; the Plant City Phosphate Complex; an ammonia terminal, phosphate warehouse and dock at the Port of Tampa; and the site of the former Bartow Phosphate Complex.
In addition, Mosaic is assuming responsibility for closure, long-term maintenance and monitoring of the phosphogypsum stacks at the Plant City and Bartow complexes. CF Industries is also transferring to Mosaic the value of its asset retirement obligation trust and escrow funds totaling approximately $200 million.
CF’s two facilities at the Port of Tampa are on Hooker’s Point.
“We anticipate no direct impacts, as I understand that they will continue to operate as they have,” port spokesman Andy Fobes said.
Rather than building a planned $1 billion phosphate processing plant in Ona in Hardee County, Mosaic would instead rely on CF’s Hardee County phosphate mine and plant near the Ona site.
A new agreement for CF to supply Mosaic with ammonia, which is used in phosphate products. would enable Mosaic to cancel plans to build a $1.1 billion ammonia manufacturing plant in Faustina, La.
The deal would enhance Minnesota-based Mosaic’s production of phosphate-based fertilizer, while allowing Illinois-based CF to focus on nitrogen fertilizer.
Shares of both companies rose Monday on the New York Stock Exchange, with CF closing up 8.7 percent at $218.36 and Mosaic up 0.7 percent at $46.67.