Four Am Law Firms Lead on $1.4 Billion Fertilizer Deal

, The Am Law Daily

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A Mosaic Co. dragline dumps phosphate matrix into a slurry pond in Tampa, Florida, U.S., on Friday, Dec. 2, 2011.
A Mosaic Co. dragline dumps phosphate matrix into a slurry pond in Tampa, Florida, U.S., on Friday, Dec. 2, 2011.

Fertilizer manufacturer and distributor CF Industries said Monday it has agreed to sell its phosphate mining and manufacturing business to Mosaic Company for $1.4 billion. Skadden, Arps, Meagher & Flom is serving as counsel to CF Industries, while Dorsey & Whitney, Mayer Brown, and Arnold & Porter are representing Mosaic.

The transaction's terms call for Plymouth, Minn.–based Mosaic to pay $1.2 billion in cash for the assets changing hands, with an additional $200 million to be placed in an asset-retirement obligation escrow. As part of the deal, Mosaic will acquire three CF Industries properties in Florida, including a 22,000-acre South Pasture phosphate mine and benefaction plant in Hardee County, a phosphate manufacturing facility in Plant City, and an ammonia terminal and finished products warehouse facility in Tampa.

Mosaic plans to combine the South Pasture mine with its existing mining assets for a savings of approximately $500 million. The two companies have also signed strategic supply agreements under which CF Industries is to provide Mosaic with approximately 1 million tonnes of ammonia per year, saving Mosiac approximately $1.1 billion.

Mosaic, a potash and phosphate mining company that currently produces 8.2 million tonnes of phosphate fertilizer per year, will increase its output by another 1.8 million tonnes annually with the addition of the new facilities. The deal is expected to close in January 2014.

The Skadden team advising CF Industries on the transaction includes energy regulation and litigation partner William Conway, real estate counsel Catherine Danz, environmental counsel Henry Eisenberg, labor and employment chair John Furfaro, tax partner Maxwell Miller, mergers and acquisitions partners Brian Duwe and Richard Witzel Jr., executive compensation and benefits partner Joseph Yaffe and intellectual property and technology partner Matthew Zisk.

Skadden has handled transactional work for CF Industries in the past, including advising on the company's purchase of a stake in nitrogen fertilizer manufacturer Canadian Fertilizers Limited, a unit of Canadian grain handling business Viterra, for $910 million acquisition in August 2012. The firm also represented CF Industries in connection with its 2009 bidding war to acquire Terra Industries. For its part, Terra used Cravath, Swaine & Moore to fend off CF Industries' takeover attempt, and agreed to sell itself to Yara International in a $4.1 billion all-cash deal. CF, however, responded with a $5.3 billion bid and eventually purchased Terra for $4.7 billion in March 2010. Skadden also advised CF Industries as the target in a bidding war when Canadian fertilizer producer Agrium Inc. attempted to take it over with a hostile $4.2 billion bid in June 2009.

The Dorsey team providing counsel to Mosaic is led by corporate partner Robert Rosenbaum. Other lawyers from the firm working on the matter include benefits and compensation partner Tim Goodman, intellectual property and technology partner Stuart Hemphill, corporate partner John Marsalek, real estate partner Robert Olson and tax partner Kim Severson. The team also includes labor and employment senior attorney Joel O'Malley and associates John Kelly (tax), Eric Rauch and Tom Ryan (corporate) and James Schultz (real estate).

Rosenbaum says Dorsey has served as Mosaic's legal counsel since the company was formed in 2004. Among the matters in which Dorsey has played a role: advising Mosaic on a March 2010 joint venture with Vale S.A. and Mitsui & Co., in which the company paid $385 million for a 35 percent economic interest in a Bayovar phosphate rock mine.

Mayer Brown is also advising Mosaic on antitrust and competition aspects of the CF Industries deal with a team led by antitrust and competition partner Richard Favretto. The firm's team also includes antitrust and competition partners John Roberti and  Adrian Steel, as well as litigation and dispute resolution associates Meytal McCoy and Brantley Webb.

Arnold & Porter, meanwhile, is advising Mosaic on environmental issues with a group led by the head of the firm's environmental practice, partner Lester Sotsky. Environmental partners Joel Gross and Peggy Otum and environmental associate Eric Rey are also working on the matter.

Sotsky says Arnold & Porter has been Mosaic's lead national environmental counsel, and that the firm continues to assist in helping Mosaic comply with U.S. Environmental Protection Agency and U.S. Department of Justice regulations involving the phosphate industry and waste management.

Mosaic's general counsel in Richard Mack.

 

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