Vale to buy out minority shareholders in Vale Fertilizantes for $1.22 billion

Vale SA, the world's second-largest mining company after BHP Billiton, will buy out minority shareholders in its fertilizer company Vale Fertilizantes SA, for around 2.2 billion reais ($1.22 billion) through a public auction due to be conducted today.

Rio de Janeiro-based Vale, which holds about 69 per cent of the total preferred shares and more than 99 per cent of the ordinary shares of Vale Fertilizantes, had earlier this year said that it plans to delist the Sao Paolo stock exchange (Bovespa) listed company.

Vale, which will buy the shares through its subsidiary Mineração Naque SA, is expected to offer 25 reais a share or $1.22 billion for both ordinary and preferred shares of Vale Fertilizantes.

Vale had acquired Fertilizantes Fosfatados SA (Fosfertil) from US agribusiness giant Bunge, Yara and Mosaic groups in 2010, for a total of $5.829 billion and spun it off into Vale Fertilizantes.

Vale Fertilizantes operates three rock phosphate mines with a capacity of 3.4 million tonnes and has reserves of about 1.2 billion tonnes

The company supplies fertiliser raw materials like phosphate and nitrogen products to local fertiliser manufacturers and also provides the domestic chemical and animal feed industries with ammonium nitrate, acids and other raw materials.