Brazil’s Lobo & de Rizzo Advogados and FERRERE (Paraguay) is helping US fertiliser company Mosaic acquire Archer Daniels Midland’s Brazilian and Paraguayan fertiliser businesses for US$350 million.
Archer Daniels Midlands (ADM) is receiving counsel from Machado, Meyer, Sendacz e Opice Advogados in São Paulo and Paraguay’s Vouga Abogados for the transaction, which was signed on 15 April.
The closing of the transaction depends on ADM receiving regulatory approval to incorporate its local fertiliser business through a transfer of assets, accomplished via a capital increase. Once this is completed, Mosaic will acquire the shares in the newly formed company. Mosaic has also agreed to enter into a five-year agreement with ADM to meet the US company’s local fertiliser demand.
Mosaic believes the acquisition of ADM’s fertiliser distribution businesses will help it corner the region’s agricultural market, which it identifies as one of the world’s fastest growing. Brazil in particular uses large quantities of fertiliser to sustain its vast agricultural sector, but has grown increasingly reliant on foreign imports, which currently account for 70 per cent of usage. In recent years, the government has sought to reverse this trend by incentivising local production.