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Potash Corporation: K+S Acquisition Now Very Unlikely


  • Potash Corporation has failed to get more aggressive in its pursuit of K+S.
  • The takeover offer of €41 euro per K+S share is still on the table.
  • The market expects K+S to remain independent.
  • K+S' shares have now surrendered most of the gains made after PotashCorp's acquisition proposal was made public in June.
  • The odds of a successful deal have decreased to 10%.

Potash Corp's (NYSE:POT) attempt to acquire German potash and salt producer K+S (OTCQX:KPLUY) will not be successful, at least that's what it looks like. In June of 2015, Potash approached K+S and submitted a proposal to acquire all outstanding shares of the German potash company for ~€41 per share, which at the time represented a 41% premium to K+S' closing price of €29.05 the day before the transaction proposal was made public. So far, Potash has not made any progress with its €7.9 billion/US-$8.6 billion bid.

Ever since Potash submitted its takeover proposal, the company has pushed to get a deal done (though not hard enough): Chief Executive Officer Jochen Tilk met with German politicians to secure political support for a takeover, and Potash eventually gave production and job guarantees to K+S in order to entice the German company into deal talks. To no avail: K+S rejected Potash's bid in early July. At the same time, K+S' share price reflected a 70-80% chance of a successful deal. For the most part, K+S share price traded between €36-38 after the proposal was made.