Potash Corp buys stake in Brazilian firm
Potash Corp. of Saskatchewan (TSX, NYSE:POT), the world's largest fertilizer company by market value, is buying a 9.5% stake in Brazil’s Fertilizantes Heringer S.A. (Heringer) for US $55.7 million, in a bet to become the company's main supplier over time.
The deal, the Canadian company’s latest effort to expand its market share in Latin America's largest economy, is expected to close in the second half of the year.
“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 late Monday in a statement.
Heringer S.A. has been in the market for 46 years and is one of Brazil’s largest producer and distributor of fertilizers. Last year the South American firm sold a 10% stake to Morocco's OCP SA for about $55 million.
PotashCorp will supply the nutrient from its mine in New Brunswick and also through Canpotex, the marketing and distribution company wholly owned by Saskatchewan-based potash producers.