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Tuesday, Aug 6
BHP would find Mosaic a tasty takeover, BofA Merrill says
- BAML urges BHP Billiton (BHP) to make a bold response to the implosion of one of the world’s two big potash cartels: Buy an established potash producer such as Mosaic (MOS) as an alternative to building the Jansen mine in Saskatchewan.
- Jansen could eventually produce as much as 10M tons/year of potash, but likely will cost ~$15B to build. BAML says that’s on a par with its enterprise value of MOS, which could produce up to 12M tons/year; MOS also has a phosphate business worth as much as $8B that could be sold.
- "Mosaic could provide instant critical scale via a large scale, low-cost, long-life asset," the firm says. (earlier)