Potash Corp. targets German giant
Potash Corp. of Saskatchewan Inc. is chasing another big international acquisition, just two years after its last effort failed.
The Saskatoon-based company submitted a written proposal to buy German fertilizer giant K+S AG. According to reports, the offer is in the neighbourhood of $8 billion US. Potash Corp. told K+S that it wants to conduct due diligence before making a formal bid.
“K+S is currently assessing the available options,” the company said in a statement. It is highly unlikely the K+S board will support this initial proposal.
Despite holding near-endless reserves of potash in its home province of Saskatchewan, Potash Corp. has overseas ambitions.
In 2013, the company tried to buy Israel Chemicals Ltd., but gave up after running into political opposition.
Buying K+S would give Potash Corp. its first major presence in Europe, which could have strategic benefits. The timing also makes sense, as the company is finishing off its $8.4-billion-US expansion program in Saskatchewan and is generating major free cash flow that could be used for acquisitions.