EuroChem signs agreement to purchase controlling share in Brazilian distributor Fertilizantes Heringer

Date:12-22-2021

• The share purchase agreement foresees EuroChem purchasing 51.48% of the distributor’s total and voting capital stock

• Deal to foster EuroChem growth strategy in Brazil, following the full integration of Fertilizantes Tocantins into EuroChem Group in 2020, and the August 2021 agreement to acquire the Serra do Salitre phosphates project

• The consummation of the transaction is subject to customary conditions, including approval by the Brazilian antitrust authority

EuroChem Group AG (hereafter “EuroChem” or the “Group”), a leading global fertilizer producer, announces the signing by one of its subsidiaries of an agreement to purchase a controlling 51.48% share in Brazilian fertilizer distributor Fertilizantes Heringer S.A., further strengthening the Group’s production and distribution capabilities in one of the world’s most important crop nutrient markets.

With a total of 14 storage, blending and distribution units in the southeast, midwest, south, and northeast regions, Fertilizantes Heringer is considered a significant contributor to Brazilian agriculture as the country’s fourth-largest distributor in terms of installed capacity, at more than 4 million metric tonnes (MMT) per annum.

“This acquisition, following anti-trust approval, will enable EuroChem to better serve the total market of Brazil – from north to south – even more reliably, while providing more outlets for our full product line of standard and premium fertilizers,” noted EuroChem Group Global Head of Sales and Distribution Charles Bendaña.

“It will also help us achieve higher efficiency in our shipping and logistics programs in order to provide reduced costs to our customers in Brazil, as well as increased netbacks to our global production facilities. Taken with our recent full acquisition of Fertilizantes Tocantins and the ongoing purchase of the Serra do Salitre phosphates project, this move will help anchor the Group as a leader both locally and abroad,” he added.

The deal is valued at 554,562,780 Brazilian reais, subject to customary price adjustment arrangements, and has been submitted for approval to the Brazilian antitrust authority – the Administrative Council for Economic Defense (CADE).

Lieven Cooreman, EuroChem Fertilizantes Tocantins CEO and Head of EuroChem’s Commercial Division in South America, noted: “With Heringer joining a South America distribution base that already includes EuroChem Fertilizantes Tocantins in Brazil and EuroChem Emerger Fertilizantes in Argentina, this deal, once approved, will cement our reputation as the crop nutrient supplier of choice across great swathes of the continent. This naturally gives our customers added confidence in our ability to cater to any crop anywhere, in a timely manner.”

In Q3, Heringer reported last 12-month sales of 1.5 MMT.

EuroChem fully concluded the acquisition of Fertilizantes Tocantins (FTO) in August 2020, maintaining its ambitious growth plans for Brazil – the world’s fastest growing large agricultural market.

In August 2021, the Group entered into a deal to acquire Serra do Salitre, an upstream integrated phosphate project at an advanced stage in the state of Minas Gerais, which will add 1 MMT to EuroChem’s annual phosphate production capacity as it reaches full production capacity in 2024. Antitrust clearance has been obtained and closing is expected to take place shortly

Credit Suisse acted as exclusive financial advisor to EuroChem in the Transaction and the law firm Pinheiro Neto Advogados acted as its legal advisor.