São Paulo – This Friday (7th), Bunge announced that it has sold its Brazilian fertilizer division to Norway’s Yara, which already operates in Brazil, for US$ 750 million. Despite having sold its assets, Bunge will remain active in the segment.
Bunge will hand Yara over its warehouses, 22 mixers, and its fertilizer brands, which processed a combined 4.8 million tonnes in 2011. On the other hand, the agreement provides that Bunge will use the Norwegian company’s structure to keep selling fertilizers to farmers “for a long time.” Bunge will, however, keep operating its fertilizer terminal on the Port of Santos.
In January 2010, Bunge and Vale announced the sale of the former’s fertilizer manufacturing division to the latter. On the occasion, Vale doled out US$ 3.8 billion for the Bunge production line, and a stake in Fosfertil. Two mines were also sold. The transaction with Yara announced this Friday concerns Bunge’s distribution division, i.e. mixers and sales.
In a press release, the CEO for Bunge Limited, Alberto Weisser, said the agreement was good for both companies. “Both parties have won with the transaction, because on the one hand, Bunge will be allowed to scale back its fertilizer activities so as to complement its agribusiness operations, thus making it more agile. On the other hand, Yara will gain a greater stake in a growing market. We are certain that the transaction will benefit our collaborators and customers, and that the business will keep growing as a part of Yara’s global portfolio,” according to the release.
Yara, in turn, announced that the acquisition will allow the company to increase its output in the country. “"I am pleased to announce this important move in Brazil, building further scale for Yara following previous acquisitions in 2000 and 2006. Brazil is a key growth market where there is significant further potential for acreage and yield increases,” the CEO for Yara, Jorgen Ole Haslestad, said in a press statement.
In 2011, Bunge’s fertilizer division posted US$ 2.6 billion in revenues. The company’s Ebitda (earnings before interest, taxes, depreciation and amortnization) reached US$ 77 million. The negotiation is pending approval from Brazilian agencies and should be completed in 2013.
Another deal
In 2010, Yara and Morocco’s state-owned Office Chérifien des Phosphates (OCP) announced a joint venture in Brazil. On that occasion, the Moroccan company acquired a 50% stake in Yara’s plant and maritime terminal in Rio Grande, in the state of Rio Grande do Sul.
*Translated by Gabriel Pomerancblum
