The world's top producer of concentrated phosphate is about to become even bigger.

Mosaic Co. has agreed to purchase Vale SA's fertilizer unit for about $2.5 billion in cash and equity.

Part of the deal will see Mosaic acquire Vale's Kronau potash plant in Saskatchewan.

Vale is expecting to receive $1.25 billion in cash and the same amount in newly-issued mosaic shares, which equates to roughly an 11 percent stake in the firm.