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The Mosaic Co MOS

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Morningstar’s Analysis

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No Changes to Our Mosaic Outlook as Vale Announces Plans to Divest Entire Mosaic Equity Stake

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

On Nov. 5, Mosaic announced Vale planned to divest its entire equity stake in Mosaic, which is 34.2 million shares, or roughly 9% of total Mosaic shares outstanding. Mosaic will repurchase one fourth of Vale's shares, while the remainder of shares will be sold on the open market. Vale will receive $1.26 billion in net proceeds, and we calculate the stock will be sold for an average price of $36.87 per share, which is only slightly above our $35 per share fair value estimate. Vale's share divestiture is a secondary offering, and our outlook for Mosaic is unchanged since our third-quarter earnings update. With no other changes to our model, we maintain our $35 per share fair value estimate and no-moat rating for Mosaic.

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Company Profile

Business Description

Formed in 2004 by the combination of IMC Global and Cargill's fertilizer business, Mosaic is a leading producer of primary crop nutrients phosphate and potash. The company's assets include phosphate rock mines in Florida, Louisiana, Brazil and Peru and potash mines in Saskatchewan, New Mexico, and Brazil.

101 East Kennedy Boulevard, Suite 2500
Tampa, FL, 33602
T +1 800 918-8270
Sector Basic Materials
Industry Agricultural Inputs
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 13,300