Saudi Arabian Mining Co. has entered into a share purchase and subscription agreement with the Mosaic Co. with the aim of expanding its phosphate business.
Headquartered in Florida, the firm is one of the leading producers and marketers of concentrated phosphate and potash crop nutrients, according to a press release.
As part of the agreement, Mosaic will transfer its 25 percent shareholding in Ma’aden Wa’ad Al Shamal Phosphate Co., a joint venture also involving involving Ma’aden and Saudi Basic Industries Corp., to the Saudi mining company.
This deal will effectively raise Ma’aden’s stake in MWSPC to 85 percent.
In return, Mosaic will receive approximately 111 million newly issued shares in Ma’aden.
Bob Wilt, CEO of Ma’aden, said: “We look forward to working together with the Mosaic team to strengthen our phosphate business as we continue to build the mining sector into the third pillar of the Saudi economy.”
Ma’aden Wa’ad Al Shamal Phosphate Co. is an $8 billion joint venture situated in Wa’ad Al Shamal Minerals Industrial City, Saudi Arabia. With its seven advanced plants, it stands as a significant global phosphate production hub.
Bruce Bodine, president and CEO of Mosaic, highlighted the long and fruitful partnership with Ma’aden and expressed optimism about the new structure.
“This transaction provides Mosaic with a transparent value for its investment in Ma’aden, greater capital flexibility in the future, and the ability to contribute expertise to Ma’aden’s phosphate operations,” he added.
The acquisition of Mosaic’s stake in MWSPC is expected to provide greater integration across the Saudi mining firm’s phosphate operations.
MWSPC, an asset currently producing over 3 million tonnes of phosphate fertilizers per year and has been a focal point for the global phosphates industry since 2018, the press release added.
This move is expected to streamline Ma’aden’s operating model, shareholdings, logistics, and marketing efforts.
Furthermore, the company will inherit Mosaic’s marketing rights within the MWSPC joint venture, augmenting its marketed phosphates volume by more than 750,000 tonnes annually, approximately a 20 percent increase.
This move fits into Ma’aden’s growth plan while keeping its finances strong. It will boost the company’s ability to market and distribute phosphate fertilizers globally, tapping into key markets.
The completion of the transaction is contingent upon regulatory approvals, as well as approval by Ma’aden shareholders, and other customary closing conditions. It is anticipated to be finalized in the third quarter of 2024.
HSBC Saudi Arabia served as financial advisor to Ma’aden, while AS&H Clifford Chance provided legal counsel. Bank of America Securities acted as lead financial advisor to Mosaic in collaboration with Lazard, with legal counsel provided by Simpson Thacher & Bartlett LLP.