Mosaic to Buy $2 Billion in Shares From Cargill Trusts

Mosaic Co., the world’s largest phosphate-fertilizer producer, agreed to repurchase shares held by charitable trusts associated with the Cargill family with a market value of about $2 billion.

The 43.3 million Class A shares are held by the Margaret A. Cargill Foundation and the Anne Ray Charitable Trust. Plymouth, Minnesota-based Mosaic will buy back 21.7 million shares on Jan. 8 and pay the average closing price in the preceding 20-day period, the company said today in a statement. The rest of the stock will be purchased in seven installments beginning in February.

The buyback helps to resolve the ownership of 128.8 million Mosaic shares that Cargill Inc. transferred to charitable trusts and Cargill family members in 2011 when it sold its controlling 64 percent stake in Mosaic.

Following that transaction, about half of those shares were held by the estate of Margaret A. Cargill, the late granddaughter of company founder William Cargill. Mosaic became eligible on May 26 to begin talks about buying back the stock.

“This is a major step toward our goal of a more efficient balance sheet by mid-2014,” Mosaic Chief Executive Officer Jim Prokopanko said in the statement. “We are continuing to evaluate other shareholder return options as we head into the new year.”

More Buybacks

Mosaic is following through on pledges to increase shareholder distributions by buying back shares, Matthew Korn, a New York-based analyst at Barclays Plc’s investment-banking unit, said today in a note to clients. The company is expected to buy back more shares in the common market and borrow money to complete the previously announced $1.2 billion purchase of CF Industries Holdings Inc.’s phosphates business, Korn said in the note.

JP Morgan Chase & Co. advised Mosaic on the evaluation of alternatives for the distribution of the restricted Cargill shares, including the agreement between Mosaic and family trusts announced today, according to the statement. Citigroup Inc. advised the trusts on the repurchase agreement.

Mosaic’s common shares fell 1.7 percent to $46 at the close in New York. The shares have declined 19 percent this year.

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