Extended release regarding Yara acquisition of Bunge's fertilizer business in Brazil
Dec 11, 2012
Oslo (2012-12-11): On 6 December 2012 Yara International ASA entered into an agreement to acquire Bunge's fertilizer business in Brazil, significantly strengthening its fertilizer position in the country. Yara and Bunge have also agreed to enter into a long-term fertilizer supply agreement, enabling Bunge to continue supplying fertilizer to farmers as part of its grain origination activities and creating a framework for logistics and other commercial activities.
Bunge operates 22 blending units across Brazil, delivering 4.8 million tons of fertilizer products in 2011. The Bunge assets also include an SSP plant with an annual production capacity of 300,000 metric tons, a port concession and a terminal development project. The business employs approximately 1,250 people, with a core management group consisting of the following members:
Daniel Maldonado Franco, President
Renato Tavares de Souza, Director Industrial
Roberto Carlos Oliveira, Director Sales and Marketing
Carlos Henrique Dantas Heredia, Director Supply Chain
The transaction is valued at USD 750 million and comprises a net operating capital value of USD 385 million and other assets valued at USD 365 million. The operating capital value is subject to post-closing adjustment. The transaction will be financed from the existing cash balance of Yara International ASA.
Closing of the deal is subject to approval of Brazilian competition authorities (CADE) and other customary approvals. The CADE approval process has a statutory maximum duration of 330 days from the date of signing. In case of major remedies imposed on Yara in connection with competition authority clearance, Yara may terminate the agreement with Bunge, subject to paying Bunge a termination fee of USD 47 million.
Brazil is a key growth market where there is significant further potential for acreage and yield increases and the acquisition creates a strong platform for future growth opportunities within the Brazilian fertilizer industry. With this agreement, Yara reinforces its position as a significant fertilizer company in Brazil, with a well-anchored local commitment combined with global leadership in safe and reliable production and the largest fertilizer trade network globally.
Historical pro forma financial statements for the acquired business are attached to this release. The income statements are prepared based on USGAAP and the balance sheet as of 30 June 2012 is prepared based on BRGAAP. The results year to date June 2012 reflect the seasonality in Brazil where the peak season for fertilizer deliveries is during the second half of the calendar year.
Yara will consolidate the acquired business from the acquisition date, including possible goodwill, and measure all identifiable assets acquired and liabilities assumed at their acquisition-date fair values.
Thor Giæver, Investor Relations
Telephone (+47) 24 15 72 95
Cellular (+47) 48 07 53 56
Esben Tuman, Media Relations
Cellular (+47) 90 50 84 00
Yara delivers solutions for sustainable agriculture and the environment. Our fertilizers and crop nutrition programs help produce the food required for the growing world population. Our industrial products and solutions reduce emissions, improve air quality and support safe and efficient operations. Founded in Norway in 1905, Yara has a worldwide presence with sales to 150 countries. Safety is always our top priority.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.