Chris Damas

Mosaic's Potash Attracts Vale's Eye

I would like to point out that foreign newspapers occasionally break stories of "impending deals" when a stock is down and perhaps needs a boost to allow people to profit. The stories often come to nothing (except perhaps to enrich the people buying in advance of the planted takeover rumour).

For example, last year the South China News ran a story that CNOOC or Sinopec was going to buy Talisman Energy and we are still waiting for that bid.

I find a Vale takeover of Mosaic possible but unlikely for two reasons:

It is hard for me to believe they would want to buy additional assets in North America at this particular time.

Vale Inco is currently experiencing (predictable) labour difficulties at the Sudbury mine they bought with the Inco takeover. Vale has found operating in Canada higher cost - our dollar has been strong. Environmental regulations are stringent in Canada.
Much easier to buy mines in developing countries.

Secondly, as has been pointed out - Cargill owns a majority position in Mosaic. So a takeover at supposedly "bottom of the cycle" prices would not be possible without Cargill shopping the stock around. And there is no sign that phosphate or nitrogen fertilizer products are at their cyclical lows.