Canada’s PotashCorp has signed an agreement to purchase 9.5% of Brazilian fertilizer producer Fertilizantes Heringer S.A. from the controlling shareholders for $55.7 million. The agreement is subject to regulatory approvals in Brazil and is expected to close during the second half of 2015. Once finalized, the agreement paves the way for a long-term potash supply agreement that would allow PotashCorp the opportunity to become Heringer’s principal potash supplier over time.

“The investment in Heringer provides PotashCorp with an important stake in a leading Brazilian fertilizer distribution company,” PotashCorp President and CEO Jochen Tilk said. “We see this agreement as an important step in enhancing our global growth strategy and one that provides flexibility for our expanding New Brunswick operations.”

Fertilizantes Heringer S.A. has been in the market for 46 years and is one of Brazil’s pioneers in the production, marketing and distribution of fertilizers. The company operates 21 production, marketing, and distribution units, strategically located in the main consuming regions of the country. All units produce, market and distribute fertilizers to meet the requirements of the different Brazilian crops.

Heringer delivered 5 million mt of fertilizers—including approximately 1 million mt of potash—in 2013, with net revenues of approximately $2.5 billion.