SASKATOON – Potash Corp. of Saskatchewan (TSX:POT) has signed an agreement to buy a 9.5 per cent stake in Brazil-based Fertilizantes Heringer S.A. from controlling shareholders for US$55.7 million. PotashCorp says the agreement, subject to regulatory approvals, paves the way for a long-term potash supply agreement that would allow it to become Heringer’s principal supplier.
The deal is expected to close in the second half of 2015.
“We see this agreement as an important step in enhancing our global growth strategy and one that provides flexibility for our expanding New Brunswick operations,” PotashCorp president and CEO Jochen Tilk said Monday in a statement on the company’s website.
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Fertilizantes Heringer S.A. has been in the market for 46 years and is one of Brazil’s pioneers in the production, marketing and distribution of fertilizers.
As one of the largest fertilizer companies in Brazil, Heringer operates 21 production, marketing and distribution units, strategically located in the main consuming regions of the country.
The company delivered five million tonnes of fertilizers – including approximately one million tonnes of potash – in 2013, with net revenues of about US$2.5 billion.
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