Norway’s Yara to buy Bunge's Brazilian fertilizer business for $750 mn

Norweigan chemical and fertiliser company Yara International today agreed to buy the Brazilian fertiliser business of US commodities giant Bunge in a $750-million cash deal, in order to strengthen its fertilizer business in Latin America's biggest economy.

Oslo-based Yara, the world's largest producer of nitrogen fertiliser, will buy Bunge's Brazilian fertilizer business, including blending facilities, brands and warehouses.

Yara and White Plains, New York-based Bunge have also entered into a long-term fertilizer supply agreement, which will allow Bunge to continue to supply fertiliser to farmers and create a framework for logistics and other commercial activities related to fertilizer sales.

Bunge said that it will retain and continue to operate its fertilizer terminal in the Port of Santos, Brazil.

Bunge operates 22 blending units across Brazil, and produced 4.8 million tons of fertilizer products in 2011. The business had revenues of $2.64 billion and an adjusted EBITDA of $77 million.

Yara said that the acquistion will bring in minimum annual synergies of $25 million by 2014 through supply chain synergies, enlarged downstream footprint for distribution of premium products and operational and administrative synergies.