It doesn't take a fertile imagination to picture one of the world's leading mining conglomerates taking over a potash and phosphate producer like Mosaic
Now that a Brazilian report has suggested that Vale
We've already seen Vale scoop up Rio Tinto's
This demonstrated appetite makes the rumors -- and I should note that BHP was said to be sniffing around PotashCorp earlier this year -- at least somewhat credible. Bolstering that believability is the argument that it's far more economical to expand existing potash production than to develop new assets from scratch.
The main problem for Vale, I think, would be to convince Mosaic shareholders to part with their shares, which sit nearly $100 shy of their 52-week high. That price looks admittedly bubbly in hindsight, but the anchoring effect is still difficult to shake. Just look at Agrium's
Compounding this issue is the ownership structure of Mosaic. The company, which spun off Compass Minerals a few years back, is itself a spinoff of privately held Cargill. The Big Ag behemoth still holds nearly two-thirds of Mosaic's outstanding shares. As a long-term owner without a public shareholder base, I would argue that Cargill is far less focused on Mosaic's quoted market value, and will be very reluctant to let go of this world-class asset.