PotashCorp has signed an agreement to purchase 9.50 percent of Brazil-based company Fertilizantes Heringer S.A. (Heringer) from the controlling shareholders for US$55.7 million. The agreement is subject to regulatory approvals in Brazil and is expected to close during the second half of 2015. Once finalized, the arrangement also paves the way for a long-term potash supply agreement which allows PotashCorp the opportunity to become Heringer’s principal supplier over time.
“The investment in Heringer provides PotashCorp with an important stake in a leading Brazilian fertilizer distribution company,” said Jochen Tilk, PotashCorp president and CEO. “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.”
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. All units produce, market and distribute fertilizers to meet the demand of the different Brazilian crops. The company delivered 5 million tonnes of fertilizers – including approximately 1 million tonnes of potash – in 2013, with net revenues of approximately US$2.5 billion. Heringer’s shares are traded in Novo Mercado, the highest level of corporate governance in BM&FBOVESPA since April 2007, under the ticker FHER3.by