Just listened to the webcast associated with the Cargill announcement. My takeaway is that this transaction could eventually lead to the acquisition of Mosaic. This may take some time to play out...hear me out. First of all, there are certain Regulatory Restrictions with a majority stakeholder. By eliminating this, there will not be those restrictions. Secondly, my understanding is that there are specific tax consequences associated with shares held by a Charitable Trust fund, which may add complexities for the acquiring party. Mosaic management made it clear that the Trust Fund wanted to sell all of it's shares. Interestingly, with the cash Mosaic carries on their balance sheet, they could purchase these shares from the trust fund. There are no restriction related to this practice. BHP has recently failed with two acquisitions (POT and Rio Tinto). Agrium failed with CF Industries who acquired Terra. So, the merger mania still exists in this sector. Also, Vale has some joint ventures going on with Mosaic and has been rumored as an interested party. Mosaic's legal counsel made it clear that this transaction does not preclude the acquisition of Mosaic. I encourage everybody to listen to the webcast and post their thoughts here. With recent weather patterns, major flooding and droughts, a lot of land will need to be fertilized. The fundamentals for Mosaic remain strong as demand for their products will be robust. The only downside for now is that Jim Crammer was recommending Mosaic.
"The world is not getting less hungry!"
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