Mosaic Buys Vale's Fertilizer Business For $2.5 Billion In Cash And Stock

Shares of Brazil's Vale S.A. gained 0.4% in premarket trade Monday, after Mosaic Co. announced a deal to buy Vale's fertilizer business for $2.5 billion. Mosaic may pay an additional $260 million over a two-year period following closing of the deal if certain financial metrics are met. Mosaic will pay for the deal with $1.25 billion in cash, which the company plans to raise through debt, and about 42.3 million shares of its common stock, or about 11% of its shares outstanding. The deal, which is projected to close in late 2017, is expected to add to Mosaic's earnings in 2018, and generate over $80 million in synergies. Mosaic's stock, which was still inactive in premarket trade, has gained 7.1% year to date, while Vale shares have more than doubled (148%) and the S&P 500 has climbed 10.5%.