{"id":239239,"date":"2010-01-27T13:00:00","date_gmt":"2010-01-27T18:00:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:387490"},"modified":"2010-01-27T13:00:00","modified_gmt":"2010-01-27T18:00:00","slug":"vales-fertilizer-deal-looks-pricey","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/239239","title":{"rendered":"Vale&#8217;s fertilizer deal looks pricey"},"content":{"rendered":"<p>Mining giant <a href=\"http:\/\/www.financialpost.com\/markets\/company\/index.html?symbol=VALE&amp;id=9495021\" >Vale SA<\/a> has made a bold move into the phosphate and nitrogen fertilizer sectors with <a href=\"http:\/\/cxa.marketwatch.com\/TSX\/en\/Market\/article.aspx?guid=http%3a%2f%2fsystem.marketwatch.com%2fnewscloud%2fdocguid%2f%7B4D4D9817-8CCE-483F-9064-52B226399C5A%7D&amp;symb=US:VALE\" >a US$3.8-billion all-cash deal<\/a> to buy Bunge Ltd.&#39;s Brazilian fertilizer business and a 42.3% stake in Fosfertil SA.<\/p>\n<p>Did Vale pay too much? BMO Capital Markets analyst Tony Robson suggested it is possible. He pointed out that according to Bunge&#39;s presentation, the transaction is valued at 12.6 times three-year average EBITDA for the fertilizer assets, which looks like &quot;a fairly steep price given the volatility of the phosphate business and what BMO Research views as weaker margins at Brazilian operations compared to those in Saudi Arabia and Northern Africa.&quot;<\/p>\n<p>From a strategic standpoint, Mr. Robson wrote that the move shows that Vale is re-investing domestically in Brazil at the expense of its global diversification strategy. This should not come as a surprise, as the company had some <a href=\"http:\/\/www.financialpost.com\/story.html?id=2130297\" >well-publicized run-ins<\/a> with the Brazilian government over its global ambitions.<\/p>\n<p>Mr. Robson was disappointed to see that Vale&#39;s 2010 dividend will be maintained at 2008 and 2009 levels of US$2.5-billion (US48\u00a2 a share), but wrote that it is &quot;understandable&quot; given the new fertilizer acquisition and the company&#39;s planned capital spending of US$12.9-billion this year.<\/p>\n<p>He rates the stock a &quot;market perform&quot; with a price target of US$30.00 a share. <\/p>\n<p><a href=\"mailto:pkoven@nationalpost.com\">Peter Koven<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/network.nationalpost.com\/np\/aggbug.aspx?PostID=387490\" width=\"1\" height=\"1\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mining giant Vale SA has made a bold move into the phosphate and nitrogen fertilizer sectors with a US$3.8-billion all-cash deal to buy Bunge Ltd.&#39;s Brazilian fertilizer business and a 42.3% stake in Fosfertil SA. Did Vale pay too much? BMO Capital Markets analyst Tony Robson suggested it is possible. He pointed out that according [&hellip;]<\/p>\n","protected":false},"author":4061,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-239239","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/239239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4061"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=239239"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/239239\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=239239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=239239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=239239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}