Yara Gains Control of Galvani in Brazil
Norway’s Yara has gained full control of Brazilian fertilizer company, Galvani Industria, Comercio e Servicos, buying out partner the Galvani family. The Oslo-based chemicals and fertilizer group took a 60% stake in the privately-held company in August 2014.
As part of the deal, certain assets will be transferred to the Galvani family, who will also receive a cash payment of $70 million over three-years from closing, as well as a conditional future payment.
The production plant in Luis Eduardo Magalhaes, the mining units in Angico dos Dias and Irece, all in Bahia state, and the Santa Quiteria greenfield phosphate project will be separated out from Galvani Industria, Comercio e Servicos and fully controlled by a new company managed by the Galvani family. The carved-out assets have a book value of $95 million as of Aug. 31.
Yara Brazil will own the industrial unit in Paulinia comprising integrated single super phosphate (SSP) production and a fertilizer bulk blend facility, along with the Serra do Salitre project in Minas Gerais with a capacity of about 1.2 million t/y of phosphate ore and 1.5 million t/y of finished fertilizer (SSP) equivalents.
“This deal streamlines our production footprint in Brazil, securing full ownership of key Yara Brazil production assets, complementing its extensive distribution capabilities and achieving a more integrated position in the Brazilian market,” said Lair Hanzen, executive vice president of Yara Brazil.
The transaction remains subject to certain conditions and approvals as well as clearance by the Brazilian antitrust authority (CADE).
Yara has been steadily strengthening its presence in the Brazilian fertilizer market since entering the country in 2000 through the purchase of Adubos Trevo.
In May this year, Yara closed its $255 million acquisition of the Vale Cubatao Fertilizantes complex, which produces around 200,000 t/y of ammonia, 500,000 t/y of nitrates and 700,000 t/y of phosphate fertilizer.