Quarterly earnings reports? Conference calls with analysts? It's a whole new ballgame for Cargill, which owns two-thirds of Mosaic's stock. And for investors, who can effectively own a piece of Cargill now by buying Mosaic stock.
Minnetonka-based Cargill, the world' largest privately held firm, lifted the veil on its operations in 1992. That's when it began disclosing its revenues and profits as part of the process of setting up its employee stock ownership plan.
But its move to establish Mosaic lays down another marker. Cargill has crafted many different relationships with companies in endless transactions during its 139 years. Yet never until now has it has transformed one of its units into a publicly held corporation.
It did that by merging its crop nutrition unit with IMC Global, a publicly held company that was facing tough times in the fertilizer business.
Corrigan, who also is president at Mosaic, is settling in there after a 38-year career at Cargill.
He stresses that the combination of IMC and the Cargill nutrition unit brings together the best of both companies.
But there's no doubt who came out on top in this transaction. The one notable exception is that departing top executives at IMC are getting at least $19 million in severance benefits thanks to contract provisions tied to the change that saw them lose control.
Six of the nine executives on Corrigan's top management team, including Corrigan and his general counsel, come from Cargill and just one from IMC. The CFO is Larry Stranghoener, who came to the firm from the same position at Thrivent Financial for Lutherans.
Seven of the new company's directors were nominated by Cargill, four by IMC. The board's chairman is Robert Lumpkins, vice chair and CFO at Cargill.
Mosaic will soon establish its permanent headquarters here, rather than in Lake Forest, Ill., the Chicago suburb where IMC had its home office.
The company's headquarters currently is at an existing Cargill site in Minnetonka. Mosaic expects to announce a new site for 125 employees, somewhere in the western suburbs, by late this month.
A Mosaic spokesperson says the company has offered most IMC employees there the opportunity to transfer here, but a yet-to-be-determined number won't.
This deal, valued at $5.6 billion, makes Minnesota the home for a Fortune 500 newcomer. Mosaic has a market capitalization of $5.77 billion, enough to rank it 12th among the state's publicly held corporations.
Its stock closed at $15.31 Tuesday, down 89 cents for the day and off from a high of $18.58 on Dec. 2, but up from $14.80 when it first began trading as Mosaic on Oct. 23.
The combined annual revenue of the merged IMC and Cargill units last year also would have placed it 12th among Minnesota's public firms.
Corrigan has been warming up for his debut Thursday with Wall Street by meeting with various investor groups in an attempt to drum up interest in the stock.
Last month, for example, he laid out Mosaic's story at Smith Barney's chemical conference in New York.
It wasn't quite like describing Google or even Target, but Mosaic is not to be dismissed lightly.
The Cargill-IMC Global deal, unveiled last January, creates the world's second-largest fertilizer company after Norway's Yara.
And yes, fertilizer is important. We need it to nourish our crops, and we need the crops to feed ourselves.
This can be a tough field, sometimes hit hard by cyclical trends such as recently soaring natural gas prices.
IMC lost money for years.
The fertilizer industry consists mainly of the production and distribution of three major nutrients: nitrogen, potassium and phosphates. It's an $11 billion business in the United States alone, but a large global presence counts for a lot.
Mosaic will have that reach, with roughly 3,000 of its 8,000 employees in 14 countries beyond the United States.
The new company's first quarterly earnings report will include a full quarter of the Cargill unit's results, for the three months ended Nov. 30, plus the 39 days of IMC's operations from Oct. 22 to Nov. 30. IMC reported on a calendar year basis, but Mosaic will report for fiscal years ending May 31 as Cargill does.
Under terms of the deal, Cargill will not sell any of its Mosaic shares for at least three years. Also, it will not acquire any publicly traded Mosaic shares for four years.
So how much of a curtain raiser is this? Well, maybe not that much.
Cargill posted revenue of $62.9 billion for the year ended May 31. Its crop nutrient unit accounted for just $2.4 billion or 3.9 percent of that total.
Yet Cargill, still mammoth and mysterious, has just gotten a little bit less that way.Pioneer Press/David Beal
