January 27, 2010 3:33 PM

Shearman, Cleary tapped for $3.8 Billion Brazilian Fertilizer Deal

Posted by Claire Zillman

Correction: Our original post identified Cleary as lead counsel. The firm is acting as just counsel. 

Bunge Limited agreed Wednesday to sell its fertilizer nutrients assets in Brazil to Vale S.A. for $3.8 billion in cash. 

Under terms of the deal, Vale will acquire White Plains, N.Y.-based Bunge's wholly owned phosphate mines and production facilities in Brazil, in addition to Bunge's 42.3 percent stake in Brazilian fertilizer producer Fertlizantes Fosfatados S.A. Bunge will retain its retail fertilizer operations in Brazil and enter into a supply agreement with Vale through 2012, with the option for an additional year.

Rio de Janeiro-based Vale, the global leader in iron-ore production and the world's second-largest nickel miner, wants to expand its business to become a leading global fertilizer supplier, according to BusinessWeek. The Brazilian government has pressured Vale in recent months to boost its domestic investments, reports Bloomberg. President Luiz Inacio Lula Da Silva has publicly encouraged the company to buy Brazilian-made vessels to transport its iron-ore and to invest in more steel products in Brazil.

Shearman & Sterling represented Bunge in the deal, adding another chapter to what lead Shearman partner John Madden called a "decades-long relationship" between the firm and the agribusiness and food company. The New York–based Madden worked on the Vale deal with fellow M&A partner Clare O'Brien and counsel Dan Litowitz.

Among the previous matters on which Shearman has represented Bunge: the company's proposed $4.8 billion merger with Corn Products International in 2008, which was ultimately called off because of poor economic conditions. 

The Bunge deal represents Shearman's latest dip into Brazil's active M&A market. As we reported in September, the firm represented Brazilian beef company JBS in its acquisition of Pilgrim's Pride, a bankrupt chicken producer.

Souza Cescon Barrieu & Flesch Advogados partners Maria Cristina Cescon, Roberto Barrieu, and Juliana Alvarenga served as Bunge's counsel in Brazil.

Vale tapped Cleary Gottlieb Steen & Hamilton partner Jeffrey Lewis and associate Paul Tiger as counsel on the deal. Lewis did not immediately return a request for comment. 

Ulhoa Canto, Rezende e Guerra represented Vale in Brazil. 

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