Yara close to acquiring Petrobras fertiliser unit

RIO DE JANEIRO: Yara International ASA is close to acquiring the fertiliser unit put on sale by state-controlled oil company Petroleo Brasileiro SA, known as Petrobras, says source.

Petrobras has selected Yara’s bid and the deal now needs to be approved by the company’s board, a source said.

An announcement is expected over the next weeks.

Yara declined to comment on “market rumors.” Petrobras declined to comment on the choosing of Yara’s proposal, referring to its latest filing in late August in which it said the companies could present binding proposals.

In a statement last Friday, Petrobras denied imminence of a sale, adding the process is in the binding phase, “having not reached the stage of receiving proposals.”

Yara already owns five plants in Brazil and 24 mixing facilities. It also owns mining and port operations.

Petrobras’ fertiliser unit, known as UFN-III, is based in Mato Grosso do Sul state, one of Brazil’s largest grain producers.

The sources did not specify the deal value, but said it will be lower than Us$100mil (Rm449mil), since the unit is not yet operational.

Petrobras has been trying to sell the unit for some time. In February it agreed to sell it to Russian group Acron, but the deal collapsed. In May, the oil company relaunched the process with advisory of the investment banking unit of Banco Bradesco SA.

Other companies interested in the deal included Brazilian group Unigel and steelmaker CSN. The final deal announcement has been delayed due to recent changes in Petrobras’ board. — Reuters