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August 5, 2014

Yara to acquire majority position in Brazilian fertilizer company Galvani

Mary Page Bailey

Yara International ASA (Oslo, Norway; www.yara.com) has entered into an agreement to acquire a 60% stake in Galvani Indústria, Comércio e Serviços S/A, for an enterprise value of $318 million.

Galvani is an independent, privately held fertilizer company, controlled by Rodolfo Galvani Jr., a Brazilian entrepreneur. The company is engaged in phosphate mining, Single Super Phosphate (SSP) production and distribution of fertilizers in the center and northeast of Brazil. Galvani also owns licenses for two new greenfield phosphate mine projects in Brazil.

The acquisition is in line with Yara's strategy for growth in Latin America, seeking to develop a production footprint in Brazil to complement its established position, following the recent acquisition of the Bunge fertilizer business in Brazil.

The company has a total SSP production capacity of approximately 1 million metric tons per year (m.t./yr) through the industrial complex of Paulinia and Luis Eduardo Magalhaes. Both sites source phosphate rock from two own mines, Lagamar and Angico dos Dias, and the leased mine Irece. To cover future demand for phosphate rock, Galvani has two greenfield and one brownfield mining project under development, as follows:

Salitre (greenfield): up to ~1,200,000 m.t./yr phosphate rock
Angico (brownfield): additional ~150,000 m.t./yr phosphate rock
Santa Quiteria (greenfield): up to ~800,000 m.t./yr phosphate rock

In addition to phosphate rock production, the projects under development include new upgrading capacity for phosphate fertilizer. Start-up for the various projects is expected between 3 and 5 years from closing date.

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