Bloomberg News

Vale Offers Up to $1.4 Billion for Fertilizer Unit Shares

June 22, 2011

(Updates with today’s closing price in second paragraph, previous acquisition in third paragraph.)

June 22 (Bloomberg) -- Vale SA, the world’s second-biggest mining company by market value, offered to buy all the shares of its fertilizers unit that it doesn’t already own for as much as 2.22 billion reais ($1.4 billion).

Vale will offer 25 reais for each share of Vale Fertilizantes SA in circulation, or about 16 percent of the unit’s total capital, according to a regulatory filing today. The offer is 32 percent more than the subsidiary’s closing price of 18.90 reais for the preferred shares in Sao Paulo trading today.

The Rio de Janeiro-based company will seek to triple potash and phosphate rock output by 2015 to meet rising demand for the crop nutrient in Brazil, the world’s biggest grower of sugar cane, coffee and oranges. The company bought assets worth about $5.8 billion for its fertilizer unit last year.

The company said it’s no longer studying a plan to list shares of the fertilizers subsidiary on any exchanges through new stock issues. Vale previously said it may combine all its fertilizer assets and sell shares in an initial public offering.

Vale rose 20 centavos, or 0.5 percent, to 43.85 reais in Sao Paulo trading today. Shares of Vale Fertilizantes have rallied 22 percent since mid-April, compared with an 8.2 percent drop for Brazil’s benchmark Bovespa index.

--Editors: Helder Marinho, Robin Saponar.

To contact the reporter on this story: Jessica Brice in Sao Paulo at jbrice1@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net


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