According to Reuters, the sale of a Vale SA fertilizer unit to Yara International ASA has been approved by the Brazilian antitrust regulator, Cade.
This deal will enable Yara to produce nitrogen-based fertilizer in Brazil. Reuters reports that six out of seven Cade board members voted to approve the transaction (valued at US$255 million), without demanding any asset sales or restrictions.
Reuters reports that a Cade technical body approved the transaction between Vale and Yara in March 2018, claiming that it would not provide Yara with a dominant foothold in any of the markets in which it operates. Nevertheless, João Paulo – a member of the Cade board – reportedly asked the regulator’s board to look more closely at the deal last month. This was because Petróleo Brasileiro SA (Petrobras) announced that it would mothball two fertilizer plants located in the north eastern region of Brazil.
According to Reuters, the rapporteur responsible for the transaction at Cade – Maurício Maia – stated that it was not clear whether or not Petrobras would actually stop operations at the two fertilizer plants, and is researching how it can keep up its presence in local ammonia markets.
Maia reportedly added that the high costs of transportation would stop Vale’s fertilizer unit from being able to provide ammonia to clients located in the north eastern region of Brazil.