Potash company Mosaic and agribusiness giant Cargill are parting ways.
Agribusiness giant Cargill is getting rid of its 64 per cent share in Mosaic — shares worth more than $24 billion in today’s market.
The assets will be distributed to will be distributed to stakeholders and debt holders.
The type of shares being divested still allow Cargill board control of Mosaic, said Mark Smith-Windsor with investment firm MGI Securities.
“They still control, indirectly control the management. I expect it kind of business as usual,” he said.
This is being done so Cargill can focus on its core business and boost its credit profile, a strategic move, said Smith-Windsor.
“With Mosaic they are getting a smaller exposure to potash in relation to a lot of their other assets and not as significant of a market position,” he said.
“The alternative though is that the price is a lot lower for someone to acquire a company like mosaic just for their potash aspects.”
Smith-Windsor said this could leave Mosaic in a vulnerable position in terms of a takeover, but may allow for some freedom as new shareholders come on board.
news@panow.com
