(Updates with details on deal, background)
April 15 (Reuters) - U.S. fertilizer producer Mosaic Co said on Tuesday it will buy Archer Daniels Midland Co's fertilizer distribution business in Brazil and Paraguay for $350 million.
Mosaic will acquire four blending and warehousing facilities in Brazil, one such facility in Paraguay and additional warehousing and logistics service capabilities. The deal is subject to regulatory approvals.
The acquisition gives Mosaic "a critical distribution platform in one of the world's fastest growing agricultural regions," Chief Executive Officer James Prokopanko said in a statement.
ADM said it had been "difficult for this business to consistently meet our return objectives".
Brazil is one of the world's biggest fertilizer importers due to nutrient-deficient soil and its huge annual crops of corn, soybeans and sugar cane. However, it can be difficult to move crops and nutrients because Brazil's transportation system is prone to bottlenecks.
The acquisition of ADM's distribution business will accelerate Mosaic's growth plans in Brazil and "replace a substantial amount of planned internal investments" in the country, Mosaic said.
As part of the deal, Mosaic agreed to supply ADM's fertilizer needs in Brazil and Paraguay for five years.
Last year, Bunge Ltd completed the sale of its Brazilian fertilizer operations to Yara International for $750 million in a move to streamline its agribusiness dealings. Through a long-term agreement with Yara, Bunge continues to supply fertilizer to farmers in Brazil. (Reporting by Rod Nickel in Winnipeg, Manitoba, and Tom Polansek in Chicago; editing by Peter Galloway)