Mosaic Announces Closing of Share Purchase and Subscription Agreement with Ma'aden

Rhea-AI Summary

The Mosaic Company (NYSE:MOS) has completed a significant transaction with Saudi Arabian Mining Company (Ma'aden), selling its 25% stake in Ma'aden Wa'ad Al Shamal Phosphate Company (MWSPC) in exchange for 111,012,433 Ma'aden shares. The deal, which closed on December 24, 2024, values the received shares at approximately $1.5 billion.

The company expects to record a pre-tax gain of approximately $0.5 billion in Q4 2024 based on the share price at closing. The transaction transforms Mosaic's previous joint venture partnership into a direct shareholding in Ma'aden, providing the company with a transparent value for its investment and enhanced capital flexibility.

Positive

• Received Ma'aden shares valued at $1.5 billion
• Expected pre-tax gain of $0.5 billion in Q4 2024
• Improved capital flexibility
• Transparent valuation of investment

Negative

• None.

Insights

Financial Analyst

The $1.5 billion Ma'aden share acquisition represents a strategic pivot for Mosaic, transforming an operational joint venture stake into a more liquid equity position. The $0.5 billion pre-tax gain will significantly boost Q4 2024 earnings, improving Mosaic's financial position. The deal's structure provides enhanced capital flexibility through the ability to monetize Ma'aden shares in the future, compared to the previous illiquid joint venture stake.

The transaction effectively shifts Mosaic's exposure from direct operational involvement in MWSPC to a broader investment in Ma'aden's entire phosphate business portfolio. With Ma'aden being the world's third-largest phosphate producer, this restructuring maintains Mosaic's strategic presence in the important Middle Eastern market while reducing operational responsibilities and risks.

Market Research Analyst

This deal marks a significant shift in the global phosphate industry landscape. By exchanging its MWSPC stake for Ma'aden shares, Mosaic gains exposure to Saudi Arabia's expanding mining sector while maintaining strategic alignment with one of the world's largest phosphate producers. The transaction's timing is particularly relevant given the increasing importance of securing stable partnerships in critical mineral supply chains.

For retail investors, think of this as trading a single property (MWSPC stake) for shares in a larger real estate portfolio (Ma'aden). The $1.5 billion value received suggests strong market confidence in Ma'aden's future growth potential, while the transparent market pricing of these shares provides clearer valuation metrics for Mosaic's investment compared to the previous joint venture structure.

TAMPA, FL / ACCESSWIRE / January 2, 2025 / The Mosaic Company (NYSE:MOS) announced that it has completed the transaction with Saudi Arabian Mining Company (Ma'aden) to sell the interest it holds in Ma'aden Wa'ad Al Shamal Phosphate Company (MWSPC) and establish the company as a shareholder in Ma'aden. In this transaction, which closed on December 24, 2024, Mosaic received 111,012,433 shares of Ma'aden -valued at approximately $1.5 billion on the closing date - in exchange for Mosaic's 25 percent stake in MWSPC, previously a joint venture among Mosaic, Ma'aden and Saudi Basic Industries Corporation. Mosaic expects to record a pre-tax gain of approximately $0.5 billion in the fourth quarter 2024 based on the share price at closing.

"We are pleased to complete this transaction. We have enjoyed a long and successful partnership with Ma'aden, and we look forward to continuing our work together under this evolved structure," said Bruce Bodine, President, and CEO of Mosaic. "Mosaic now has a transparent value for its investment in Ma'aden and greater capital flexibility in the future."

About The Mosaic Company
The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single source provider of phosphates and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about proposed or pending transactions or strategic plans and other statements about future financial and operating results. Such statements are based upon the current beliefs and expectations of The Mosaic Company's management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: political and economic instability and changes in government policies in countries in which we have operations; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic's international operations and those of joint ventures in which Mosaic participates, a material adverse change in our Ma'aden investment with respect to the financial position, performance, operations or prospects of Ma'aden; difficulties with realization of the benefits of our natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic's decisions to exit business operations or locations; changes in government policy; changes in environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic's operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic's processes for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing from management's current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadian resources taxes and royalties; reduction of Mosaic's available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic's potash mines; other accidents and disruptions involving Mosaic's operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company's reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.

Investors Jason Tremblay 813-775-4226 jason.tremblay@mosaicco.com Joan Tong, CFA 863-640-0826 joan.tong@mosaicco.com

Media Ben Pratt 813-775-4206 benjamin.pratt@mosaicco.com

SOURCE: The Mosaic Company

View the original press release on accesswire.com

FAQ

What is the value of Ma'aden shares received by Mosaic (MOS) in the December 2024 transaction?

Mosaic received 111,012,433 Ma'aden shares valued at approximately $1.5 billion on the December 24, 2024 closing date.

How much pre-tax gain will MOS record from the Ma'aden transaction in Q4 2024?

Mosaic expects to record a pre-tax gain of approximately $0.5 billion in the fourth quarter of 2024 based on the share price at closing.

What percentage stake did Mosaic (MOS) sell in MWSPC?

Mosaic sold its 25 percent stake in Ma'aden Wa'ad Al Shamal Phosphate Company (MWSPC).

When did Mosaic (MOS) complete the Ma'aden share exchange transaction?

The transaction closed on December 24, 2024.

What are the benefits of the Ma'aden transaction for Mosaic (MOS) shareholders?

The transaction provides Mosaic with a transparent value for its investment and greater capital flexibility in the future.