PotashCorp Offers To Acquire Germany's K+S

(RTTNews) - Canadian fertilizer giant Potash Corp of Saskatchewan, Inc. (POT, POT.TO) said Thursday that it has made a private proposal to German potash maker K+S Group (SDFG) to negotiate that company's acquisition.

Potash Corp. added there is no certainty that any offer will ultimately be made, or as to the terms of such an offer.

Meanwhile, K+S responded to the announcement by saying that it is currently assessing the available options and the process is still ongoing.

According to media reports, Potash Corp has offered to acquire K+S in a deal valued at more than 7 billion euros, or almost $8 billion. Potash Corp has a market capitalization of $26 billion, while K+S has a market capitalization of 5.6 billion euros.

K+S, which is developing a mine in the Canadian province of Saskatchewan, is said to be likely to reject the offer as too low, as it does not take into account the potential synergies of the two companies.

Potash Corp.'s acquisition offer comes amid lower prices for potash after the break-up in mid 2013 of an industry cartel that helped shape global prices. Prices for the fertilizer product could fall further unless demand picks up.

This is Potash Corp's second attempt to acquire K+S. An earlier bid by the company in 1997 was blocked by the German competition watchdog.

POT closed Thursday's regular trading on the NYSE at $31.89, up $1.45 or 4.76 percent on a volume of 15.93 million shares. However, in afterhours, the stock edged down 0.14 or 0.44 percent to $31.75.

On Frankfurt's Xetra, K+S shares closed Thursday's trading at 29.05 euros, up 0.43 euros or 1.52 percent on a volume of 1.66 million shares.