By Rod Nickel
Oct 28 (Reuters) - Mosaic Co said on Monday that it would buy the phosphate business of fellow U.S. fertilizer company CF Industries Holdings Inc for $1.2 billion in cash.
Shares of Mosaic, the world's biggest producer of finished phosphate products, rose 1.7 percent to $46.75 in trading before the market opened, while CF was up 2.7 percent at $215.32.
Minnesota-based Mosaic will acquire the South Pasture phosphate mine and plant, a phosphate manufacturing plant and ammonia terminal and warehouse facilities, all in Florida.
The facilities produce about 1.8 million tonnes of phosphate fertilizer per year, topping up the annual 8.2 million tonnes produced by Mosaic and adding about 30 cents per share to its 2015 earnings, the company said.
Mosaic will also commit $200 million to cover the closure and long-term care of phosphogypsum stacks under CF's Florida operations.
The deal signals Illinois-based CF's increased focus on its core nitrogen fertilizer products and comes after Mosaic has said it was looking to increase its production of phosphate, one of three critical crop nutrients.
Mosaic stock has been under pressure this year because of weakness in the global price of the crop nutrient potash, of which the company is the second-biggest North American producer.
CF will supply Mosaic with 1 million tonnes a year of ammonia, a nitrogen product used in making finished phosphate products. This will allow Mosaic to scrap its plans to build a $1.1 billion ammonia manufacturing plant in Faustina, Louisiana.