Fertilizer Offensive

The Canadians are Coming

Rocanville Potash Corp underground production supervisor Dave Esslinger displays a sample of potash 1000 metres (3280 feet) below surface at the potash mine in Saskatchewan September 30, 2010. A far-reaching, independent report on the economic impact of a Potash Corp takeover will set the tone for a Canadian political response to BHP Billiton's $39 billion hostile bid or any other offer that surfaces. Picture taken September 30, 2010. REUTERS/David Stobbe (CANADA - Tags: BUSINESS) - RTXSWZS
Digging for the white gold known as potash.
  • Why it matters

    Why it matters

    The German firm could lose its independence in a deal estimated to be worth around €10 billion, or $11.9 billion, including debt.

  • Facts


    • The unconfirmed offer amounts to more than €40 per K+S share, Handelsblatt has learned.
    • PotashCorp used to be the world leader in the fertilizer industry, but has since been surpassed by Russian and Belarusian rivals.
    • This is the second takeover from Canada in two weeks after Hudson’s Bay bought Galeria Kaufhof department store chain on June 15.
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Germany’s K+S is already a thoroughly international operation, and recently boasted its new facilities for potash fertilizer in Vancouver, Canada.

Canadian rival PotashCorp, led by the German chief executive Jochen Tilk, now seem to be returning the favor – with interest:

K+S has become a takeover target for the fertilizer maker PotashCorp from the Canadian province of Saskatchewan, K+S confirmed on Thursday evening after Handelsblatt had reported on the matter.

“K+S is currently assessing the available options; this process is still ongoing,” K+S said in a short statement.

According to information obtained by Handelsblatt from financial sources, the K+S supervisory board is examining an offer estimated to be worth €10 billion, $11.9 billion, including debt.

The takeover bid for the German firm with 14,000 employees has apparently been well prepared by its rival from Canada. Potash would apparently pay more than €40 per K+S share, meaning it would value the company at roughly €10 billion, including debt. Against its current share price, that’s a 40-percent increase. On Friday, K+S shares were up 26 percent at €36.70 at 0943 GMT.

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