AgroPages-Yara acquires 60% of shares of Galvani-Agricultural news

Yara acquires 60% of shares of Galvani

Norway's Yara International ASA announced that it has signed an agreement worth $318 million to acquire 60% stake of Galvani, a Brazilian phosphate fertilizer company.

In a statement, Yara reports that Galvani operates in mining phosphate rock and phosphate fertilizers production (Single Super Phosphate - SSP), mainly serving the markets of the Southeast, Midwest and Northeast regions of Brazil. Galvani has expansion plans that include two new projects (greenfield) mining of phosphate rock in Brazil.

The $318 million investment includes $132 million for existing businesses and $186 million for mining projects and production, but it can be adjusted.

The transaction is subject to approval by the antitrust authorities (Administrative Council for Economic Defense) and other customary approvals. The completion of the deal is expected in the fourth quarter of this year.

The president and CEO at Yara International, Joergen Ole Haslestad, said in a statement that the acquisition represents another significant step to achieve the growth strategy in Latin America, strengthening the company’s position in Brazil and showing a commitment with development and investing on Brazilian agriculture.

One year ago, Yara announced the acquisition of Bunge fertilizers in Brazil. The transaction was valued at US$ 750 million, considering an amount of working capital of US$ 385 million, besides other assets which may value US$ 365 million.

The president of Galvani's Board of Directors, Rodolfo Galvani Jr., said that the agreement with Yara transcends a traditional joint venture. According to him, the company now has an ideal partner for its projects.

The total revenues of Galvani was $352 million in 2013 with an EBITDA of $48 million. The company has the capacity of SSP production of nearly one million tons throughout the industrial complex of Paulinia (SP) and Luís Eduardo Magalhães (BA). Both unities use phosphate rocks originated from the mines of Lagamar (state of Minas Gerais), Angico dos Dias (Minas Gerais) and Irecê (Bahia).

Besides the phosphate rocks, the development projects include the produciton of phosphate fertilizers. These projects must be completed from 3 to 5 years after closing the deal.