Anglo American PLC is expected to confirm a deal to acquire fertilizer company Sirius Minerals PLC for more than US$500 million excluding debt, ahead of the early February deadline to finalize the offer, Reuters reported, citing three unnamed sources.

The diversified mining major has until Feb. 5 to make a firm bid for Sirius, but sources said the offer is likely to come in the coming days. Further, the two parties have engaged in talks over the last nine months, with Anglo American unlikely to improve its offer, the sources added.

A deal will result in Sirius securing a lifeline, as it has struggled in recent months to secure funding for the second stage development of its North Yorkshire polyhalite project in the U.K. and save jobs at the operation.

In September 2019, a proposed US$500 million senior secured notes offering was shelved due to poor bond market conditions.

In addition, the deal will mark Anglo American's return to the fertilizer industry after selling its Brazil fertilizer asset in 2016 in the wake of a commodity market crash.

Moody's said Anglo American's planned acquisition of Sirius Minerals may increase the mining giant's financial risk profile for a number of years.