Vale bids $1.3 billion for rest of fertilizer unit

Brazilian mining giant Vale SA said its potash-producing subsidiary will offer to acquire the rest of Vale Fertilizantes SA it doesn't already own for BRL$2.2 billion ($1.3 billion) in cash.

The move comes after Vale unveiled plans in September to invest $15 billion by 2020 to diversify its production assets, a shift aimed at making it one of the world's biggest potash and phosphate rock producers. Potash and phosphate are used to make fertilizer.

The BRL25 per-share offer represents a 1.7% premium to Vale Fertilizantes's Wednesday closing price of BRL24.59. Vale already owns 68% of the fertilizer unit, according to FactSet research.

Vale said two-thirds of the shareholders who participate in the auction will need to approve the deal for it to be effective, or the company will withdraw its offer.