Dubai: Two Saudi entities are cutting a deal, with the mining giant Ma'aden set to issue new shares to The Mosaic Company.
This is how the deal will be structured:
- Mosaic will sell all its shares in Ma’aden Wa’ad Al Shamal Phosphate Company, a joint venture between Ma’aden, Mosaic and Saudi Basic Industries Corporation (Sabic).
- These shares will be sold to Ma’aden in exchange for newly issued shares in it.
On completion of the share issue and transfer process, the transaction will increase Ma’aden’s shareholding in Ma’aden Wa’ad Al Shamal Phosphate Company to 85 per cent. Mosaic will exchange its 25 per cent shareholding for approximately 111 million shares in Ma’aden..
The acquisition of Mosaic’s stake in MWSPC - currently producing over three million tons of phosphate fertilizers per year - is expected to create 'greater integration' across Ma’aden’s phosphate operations.
"It will streamline its operating model, shareholdings, logistics and marketing," said a statement. Ma’aden will also acquire the marketing rights of Mosaic within the MWSPC joint venture, thus increasing its volume of Ma’aden marketed phosphates by more than 750,000 tons annually (around 20 per cent of additional volumes).
"The transaction delivers on Ma’aden’s growth agenda while preserving its balance sheet," the statement added.
Q3-24 completion
The transaction is expected to be completed during the third quarter of 2024.
“Having formed our partnership with Mosaic in 2013, more than a decade on, this is an important evolution that we believe will create significant benefits for the growth of our phosphate business," said Bob Wilt, CEO of Ma'aden. "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.”
HSBC Saudi Arabia served as financial advisor to Ma’aden and AS&H Clifford Chance acted as legal counsel. The Bank of America Securities served as lead financial advisor to Mosaic in conjunction with Lazard. Simpson Thacher & Bartlett LLP served as legal counsel to Mosaic.
