Saudi Arabian Mining Co. Expands Phosphate Business Through Agreement with Mosaic Co.
Riyadh: In a strategic move to enhance its phosphate business, Saudi Arabian Mining Co. has entered into a share purchase and subscription agreement with the Mosaic Co., a leading producer and marketer of concentrated phosphate and potash crop nutrients based in Florida.
As part of the agreement, Mosaic will transfer its 25 percent shareholding in Ma’aden Wa’ad Al Shamal Phosphate Co., a joint venture involving Ma’aden and Saudi Basic Industries Corp., to the Saudi mining company, increasing Ma’aden’s stake in MWSPC to 85 percent. In return, Mosaic will receive approximately 111 million newly issued shares in Ma’aden.
Bob Wilt, CEO of Ma’aden, expressed excitement about the collaboration with Mosaic, stating, “We look forward to working together with the Mosaic team to strengthen our phosphate business as we continue to build the mining sector into the third pillar of the Saudi economy.”
Ma’aden Wa’ad Al Shamal Phosphate Co., an $8 billion joint venture located in Wa’ad Al Shamal Minerals Industrial City, Saudi Arabia, boasts seven advanced plants and serves as a significant global phosphate production hub.
Bruce Bodine, president and CEO of Mosaic, emphasized the positive partnership with Ma’aden and the potential of the new structure, stating, “This transaction provides Mosaic with a transparent value for its investment in Ma’aden, greater capital flexibility in the future, and the ability to contribute expertise to Ma’aden’s phosphate operations.”
The acquisition of Mosaic’s stake in MWSPC is expected to enhance integration across Ma’aden’s phosphate operations, streamline its operating model, and boost marketing efforts.
Furthermore, Ma’aden will inherit Mosaic’s marketing rights within the MWSPC joint venture, increasing its marketed phosphates volume by more than 750,000 tonnes annually, a significant 20 percent increase.
This strategic move aligns with Ma’aden’s growth plan, strengthening its ability to market and distribute phosphate fertilizers globally and tap into key markets while maintaining financial stability.
The completion of the transaction is subject to regulatory approvals, Ma’aden shareholder approval, and other customary closing conditions, with an anticipated finalization in the third quarter of 2024.
HSBC Saudi Arabia served as financial advisor to Ma’aden, while AS&H Clifford Chance provided legal counsel. Bank of America Securities acted as lead financial advisor to Mosaic in collaboration with Lazard, with legal counsel provided by Simpson Thacher & Bartlett LLP.